Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

PRIVATE BUSINESS

FELIXSTOWE DOCK AND RAILWAY BILL

Lords Amendments considered and agreed to.

WAYS AND MEANS

COVENT GARDEN MARKET

Resolved,
That, for the purposes of any Act of the present Session to prohibit the use for certain purposes of lands at Covent Garden and to provide for the disposal of such lands and for the basis of compensation payable on the disposal of them, it is expedient to authorise—

(a) the charging of any sums by way of betterment levy which are chargeable by virtue of that Act;
(b) the payment into the Consolidated Fund of any sums required to be so paid by virtue of that Act.—[Mr. Harold Lever.]

Oral Answers to Questions — NATIONAL FINANCE

£ Sterling (Value)

Sir Knox Cunningham: asked the Chancellor of the Exchequer whether, taking the value of the £ sterling at 20s. on 1st November, 1967, he will state its value today.

The Financial Secretary to the Treasury (Mr. Harold Lever): Taking the internal purchasing power of the £ as 20s. in November, 1967, its value in May, 1968, the latest date for which information is available, is estimated at 19s. 3d. This estimate is based on movements in the index of retail prices.

Sir Knox Cunningham: Will the hon. Gentleman tell his right hon. Friend the

Prime Minister, in words of one syllable and four letters, that this is what has happened to the £ in our pockets?

Mr. Lever: It is unnecessary to give my right hon. Friend this information in words of any particular number of syllables.

Gold

Mr. Ian Lloyd: asked the Chancellor of the Exchequer (1) whether it remains Her Majesty's Government's policy to discontinue the purchase of newly-mined gold by the Bank of England for monetary purposes, either from South Africa or other sources, indefinitely;

(2) what discussions have taken place with the South African Treasury or Reserve Bank on the future gold buying policy of Her Majesty's Government; and with what result.

The Chancellor of the Exchequer (Mr. Roy Jenkins): I have nothing to add to the Washington communiqué with regard to the Government's policy towards the buying and selling of monetary gold, about which I made a statement to the House on 18th March. Discussions with South Africa have been confined to normal Central Bank contacts.—[Vol. 752, c. 40–9.]

Mr. Lloyd: Does this mean that the size of the United Kingdom gold reserves will depend entirely on its balance of payments with the other nine of the Group of Ten, and that there is no question of accepting either newly-mined gold or monetary gold from outside this Group?

Mr. Jenkins: I do not think that the hon. Gentleman is right in that assumption. We could acquire gold from sources other than those within the terms of the Washington communiqué.

Houses (Rent Increases)

Mr. Turton: asked the Chancellor of the Exchequer whether it is his policy to limit weekly increases of rent of each Government controlled home to 7s. 6d. in a 12-month period, as recommended in Command Paper No. 3604.

The Minister of State, Treasury (Mr. Dick Taverne): The recent rent increases for houses owned by Government Departments are within the recommended


limits of an average of 7s. 6d. a week for standard rents, and a maximum increase for any individual house of 10s. a week, in any one year.

Mr. Turton: Is the hon. and learned Gentleman aware that the tenants of Government-controlled property will have had a 30 per cent. increase in rents, spread over 3 years, up to 1970? Does he appreciate that this is making tenants believe that the Government have no hope of stabilising the cost of living in this period, and that it is a very bad example for other landlords?

Mr. Taverne: This is not a bad example for other landlords. There has been no increase since 1958 and the average increase in these rents will be about 3s. 4d. a week in the next three years. The largest individual increase is 8s. 3d. a week in any one year, which is less than the recommended limit.

Sir Harmar Nicholls: How does this increase compare with that allowed under the recommendation of the Prices and Incomes Board to local authorities?

Mr. Taverne: It is within the limits recommended, and within the policy announced by the Ministry of Housing for local authority tenants.

Bank Rate

Mr. Marten: asked the Chancellor of the Exchequer what has been the number of months since October, 1964, in which Bank Rate has been at 7 per cent. or higher.

Mr. Harold Lever: Since October, 1964, Bank Rate has been at 7 per cent. or higher for a total of approximately 20 months.

Mr. Marten: Is the Minister aware that Bank Rate has never been so high for so long since 1694, when records were first kept? In the light of the Labour Party's statement at the last election, about the level of interest rates, would the Government deal with this rather "grotty" performance when it has its confessional in the autumn?

Mr. Lever: I do not recall the reference to incidents of 1694 in the Labour Party's election manifesto. On the other hand, our rates have to keep in line with world rates, and world rates

are at a pretty high level, historically speaking.

Sir C. Osborne: Is the Minister aware that one of the consequences of this continued high Bank Rate is that the 3½ per cent. War Loan, £2,000 million of which is held by ordinary people, stands at its lowest ever, 46 per cent., and unless Bank Rate is reduced the holders of Government stock will continue to be swindled? Will he do something to help?

Mr. Lever: It is a logical corollary of an increase in interest rate that the value of unredeemable stock will decline correspondingly. We are anxious to see interest rates throughout the world come down, but ours cannot go out of line, and we can only have more freedom for action when our balance of payments has been put right.

Gold (Two-tier System)

Mr. Sheldon: asked the Chancellor of the Exchequer if he will make a statement on the present operation of the two-tier gold system.

Mr. Bruce-Gardyne: asked the Chancellor of the Exchequer if, in view of current strains in the two-tier gold price system he will reconsider the Government's decision to oppose a change in the official price of 35 dollars per ounce for gold.

Mr. Roy Jenkins: The two-tier gold system has been working satisfactorily. I see no reason why it should not last a considerable time.

Mr. Sheldon: But since it is almost certain that there has been some leaking of gold between these two tiers, can my right hon. Friend make an estimate, however approximate, of how much it might be?

Mr. Jenkins: No. I would not necessarily accept my hon. Friend's assumption. I certainly could not make an estimate.

Mr. Bruce-Gardyne: Has the Chancellor noticed that Dr. Emminger has said that one of the effects of raising the price of gold will be to enable all countries to pursue more expansionary economic policies? Does the right hon. Gentleman agree with that forecast, and


does he regard it as an advantage or disadvantage in raising the price of gold?

Mr. Jenkins: I have not noted this statement of Dr. Emminger, although in general I note statements from him and other central bankers with close attention and great interest. Raising the price of gold would be one way of increasing liquidity, but, in our view, it would be an irrational and lopsided and, possibly, disrupting way.

Mr. Barnett: While hoping that the two-tier system will give us adequate breathing space, may I ask my right hon. Friend whether he feels that there is an adequate amount of liquidity, bearing in mind the reducing deficit in the United States and the long time it will be before the S.D.R.s come into force? Does my right hon. Friend feel that some further action might be needed fairly soon to increase liquidity?

Mr. Jenkins: This problem requires constant attention. The progress which we have made and which we hope to continue to make with the S.D.R. scheme will be a substantial move in this direction, although I do not close my mind to other methods.

Mr. Gresham Cooke: In view of the pressures on the two-tier system, should we not be well advised to ask the Americans to raise the price of gold from 35 dollars?

Mr. Jenkins: No. The assumption three months ago would have been that the gap between the two prices would be substantially in excess of that which exists at present.

Economic Outlook (Forecasts)

Mr. Sheldon: asked the Chancellor of the Exchequer what forecasts he intends to publish during 1968.

Mr. Roy Jenkins: It is not my intention to publish during the remainder of this year revised forecasts of the short-term economic outlook comparable in scope and detail with those embodied in the Financial Statement for 1968–69.

Mr. Sheldon: Would my right hon. Friend give an indication of his intentions about publishing future forecasts, and, in particular, can he say whether he intends at some time to publish forecasts giving

indications of some of the elements in our balance of payments?

Mr. Jenkins: My general intention is to move, as I have tried to do in the forecasts published in association with the Budget statement, in the direction of disclosing more fully than has been done before the basis on which we make our forecasts with a view to having an informed discussion. We made a big step forward this year. It is reasonable to see how it goes for the time being.

Mr. Iain Macleod: While accepting and welcoming the fact that the right hon. Gentleman has given more information than any of his predecessors, may I urge him to continue the good work and to give even more forecasts and not be too disheartened by the fact that every one he has given so far has been wrong?

Mr. Jenkins: I thought that the right hon. Gentleman was being almost too agreeable to be true in the early part of his supplementary question. I shall not be put off by the latter part, except to say that he is wrong. Our forecasts of exports and of the growth of the national product show every indication of being in line with what we suggested. But, whether they be accurate or not, I will bear in mind what I took to be the more serious part of his supplementary question.

Government Employees (Holidays)

Dr. John Dunwoody: asked the Chancellor of the Exchequer what steps he will take to encourage Government employees to take their holidays outside the peak season.

Mr. Harold Lever: I do not think that such encouragement is either necessary or practicable.

Dr. Dunwoody: Would my hon. Friend consider this matter again, because if he could encourage Government employees to do this we would avoid the near shut down of some Government Departments in August and help the economy of the tourist areas considerably in the out-of-season period?

Mr. Lever: Civil servants must have the same measure of choice in these matters as other citizens.

Sir C. Osbome: And Members of Parliament.

Mr. Lever: There is a limit to what we should properly do in the direction suggested by my hon. Friend.

Art and Jewellery Sales (Taxation)

Mr. Gwilym Roberts: asked the Chancellor of the Exchequer what estimates the Treasury has made of the yield from a 10 per cent. sales tax on art and jewellery sales in Great Britain; and if he will take steps to introduce this form of taxation.

Mr. Harold Lever: As regards the first part of the Question, the information is not available on which to base a reliable estimate. On the second part of the Question, I have nothing to add to what my right hon. Friend said in his Budget Speech about new methods of taxation.— [Vol. 761, c. 273–4.]

Mr. Roberts: However, would my hon. Friend accept that it is difficult for workers on the shop floor, coping with prices and incomes policy, to understand the Government's attitude to these sophisticated spivs trading in art treasures worth many hundreds of thousands of £s and paying the minimum of taxation?

Sir C. Osbome: Who says that they are spivs?

Mr. Lever: I would not accept that people trading in art and similar matters should be regarded as spivs. But they are regarded by the Inland Revenue as trading for tax purposes and are charged tax accordingly. I cannot understand any special reason for anxiety concerning private citizens.

Sir R. Cary: Since when has the Director of the National Gallery been a sophisticated spiv?

Mr. Lever: I do not think that that follows from the Question or the supplementary question.

Scrip Issues

Mr. Ridley: asked the Chancellor of the Exchequer whether scrip issues may now be made by companies.

Mr. Taverne: As the provisions in the Prices and Incomes Bill adequately control increases in dividends, there is no need to duplicate safeguards by seeking powers in relation to scrip issues.

Mr. Ridley: Is it not idiotically silly to put control of scrip issues into the voluntary guidance published by the Treasury? Would the hon. and learned Gentleman accept that it is very dangerous to have government by Ministerial circular, which proves that things of this sort can go wrong and silly mistakes can be made by the Treasury?

Mr. Taverne: It was very important in the context of the prices and incomes policy to deal with matters which could be widely misunderstood, but the Prices and Incomes Bill makes it clear that any increase could be subject to control.

Purchase Tax (School Equipment)

Sir J. Langford-Holt: asked the Chancellor of the Exchequer whether he is aware that pupils' tables which are now becoming more widely used by education authorities in place of desks are tax-free if provided with an ink-well, but are taxable if no ink-well is provided; and if he will take action to correct this anomaly.

Mr. Harold Lever: There is no anomaly. Pupils' tables specialised for school use are not taxable, whether or not provided with ink-well holes.

Sir J. Langford-Holt: May we assume, therefore, that it is part of the leap forward into the technological age to induce local authorities, against their will, to provide tables for earthenware ink-pots for use with quill pens?

Mr. Lever: I do not know whether the hon. Gentleman appreciated the purport of my Answer, but the implication of his supplementary question is that we tax desks for schools according to whether or not they have ink-well holes. I do not see any reference to quill pens. There is no anomaly in this matter. The desks are duty-free in either case.

Economic Position

Mr. Gwilym Roberts: asked the Chancellor of the Exchequer whether he is satisfied with the results of devaluation


in the light of the latest balance of payments figures; and if he will make a further statement on the general economic position.

Mr. Roy Jenkins: The main effects of devaluation and the Budget have not yet had time to work through, particularly on the volume of imports, but export performance has been encouraging.

Mr. Roberts: Now that the half-baked "I'm Backing Britain" campaign has died a natural death, would my right hon. Friend consider introducing a Government-inspired drive to encourage import substitution? Would he consider instituting research into every method in and outside G.A.T.T. which can be used to give advantage to home-produced products?

Mr. Jenkins: Import substitution is of great importance at present. It is, I think, difficult: to stress enough the advantage which there is for the business community and for the community as a whole if we pursue this matter energetically, because it is the key to a steady growth affecting both profits and real wages over the next few years.

Sir C. Osborne: Did the right hon. Gentleman read the article in the Economist on Saturday which stated that the balance of payments deficit for the first six months of this current year was running at £1,300 million against a so-called £800 million deficit in 1964? Does he accept those figures?

Mr. Jenkins: We have not yet seen figures for the first half of this year. I read the article. Questions have been tabled about the first quarter which I shall answer later.

Mr. Maclennan: Has my right hon. Friend had an opportunity of reading the Report of the "Little Neddy" on the agricultural industry concerning the opportunities for import savings of up to £220 million by 1972? Will my right hon. Friend give it the most favourable consideration?

Mr. Jenkins: I will certainly pay careful attention to this Report.

Sir H. Harrison: I should like to reinforce what was said by the hon. Member for Caithness and Sutherland (Mr. Maclennan). The Eastern Counties are

prepared to help. Will the Chancellor study carefully this way of saving imports by the agriculture industry?

Mr. Jenkins: I shall study this matter carefully in relation not only to the Eastern Counties, but to the whole of the country. However, it is necessary to have some regard to the public expenditure aspect of the matter as well as the import saving aspect.

Mr. Barnett: As imports are causing the greatest concern, will the Chancellor give his estimate of the import figures for the remaining six months of the year?

Mr. Jenkins: No. I have no further forecast to offer to the House.

Mr. Higgins: In the light of the figures which are available, will the Chancellor tell us whether he thinks his main forecast or his higher forecast is more likely to be achieved, or does he think we shall fall below both?

Mr. Jenkins: I think that the export position is at least as promising as I indicated in my main forecast.

Exchange Rates

Sir B. Rhys Williams: asked the Chancellor of the Exchequer what steps he is taking, following the successful reopening of the free London gold market, to ensure that the transition to a general system permitting reasonable flexibility in the rates of exchange of the world's main trading currencies takes place in an orderly way.

Mr. Roy Jenkins: I would not favour a move to a system of greater flexibility in exchange rates than at present.

Sir B. Rhys Williams: Is it not becoming evident that the whole Bretton Woods concept of permanently fixed exchange rates and an immutable price for gold are a vanishing vision? Should we not accept it with gladness? Would it not be statesmanlike for the Government in the management of sterling to shape their policies accordingly?

Mr. Jenkins: I think that it would be extremely rash to take the view that the 20 or nearly 25 years of the international monetary system, based on the Bretton Woods Agreement, which we have experienced and which has led to the most rapid growth of world trade


and the national wealth of most countries participating, has not, on the whole, been a successful system. I do not say that it does not need modification, but it would be foolish to turn our backs on it and say that we want something utterly different rather than something built upon it.

50 New Penny Piece

Mr. Strauss: asked the Chancellor of the Exchequer whether he proposes to accept the published design of the new 50 new pence coin proposed by the Decimal Currency Board.

Mr. Ogden: asked the Chancellor of the Exchequer if he will now ask the Decimal Currency Board to make further recommendations on the form and style of a 50 new pence coin.

Mr. Harold Lever: The Government's acceptance of the Decimal Currency Board's recommendation on the shape and size of the new 50 new penny piece was announced on 9th May. The design has not yet been decided.

Mr. Strauss: Does that mean that the design that was exhibited in the Members' Library, which caused widespread unfavourable comment, has not been accepted and that there will be something better?

Mr. Lever: The design of the coin has not yet been decided, but its shape, which will be an equilateral curved heptagon, has been settled.

Mr. Ian Lloyd: Why are the Government so reluctant to seize the opportunity to put a high value of much smaller coins? In view of the current rate of inflation, will not these very large and heavy coins be valueless in about 10 years' time.

Mr. Lever: It is thought that this will be a convenient coin for a fairly large sum which can be readily distinguished from other coins. For that reason, it has to be larger and somewhat different in shape.

Surtax

Sir B. Rhys Williams: asked the Chancellor of the Exchequer what estimate he has made of the effective increase in purchasing power that would

follow from a total abolition of Surtax; and what estimate he has made of the effect on the net yield of taxation within one year and within five years of the change.

Mr. Harold Lever: I estimate that, once the change was fully operative, the abolition of Surtax at present rates would increase incomes, and therefore purchasing power, by about £280 million. The direct increase in demand would be much less because a high proportion of the additional income would be likely to be saved. I have made no estimate of the effect of abolition on the net yield of taxation, but at present income levels the gross yield would be reduced by about £200 million in the first year after the change and by about £275 million in the fifth year.

Sir B. Rhys Williams: Is it not clear that there is no genuine moral justification for this tax, or even an economic justification for it, and that, in the long run, the entire economy would gain if this vindictive survival from the class war were brought to an end?

Mr. Lever: This vindictive survival from the class war survived vindictively throughout Conservative Governments. I am afraid that its total abolition cannot be readily envisaged, but some reconsideration of rates and the replacement of the revenue from similar classes in society might well be envisaged.

Broadcasting Authorities (Dollar Payments)

Sir J. Langford-Holt: asked the Chancellor of the Exchequer, in view of the need to restrict foreign expenditure, whether he will refuse to allow dollars to be spent in the United States of America by the broadcasting authorities for the rights to perform parlour games which were invented in Great Britain.

Mr. Harold Lever: No. There are no exchange control restriction on current payments of this kind.

Sir J. Langford-Holt: Is the Financial Secretary therefore saying that any citizen may contract, without any "no say" by him, to pay to an American citizen, if it is the basis of contract, any amount for performing rights or the right to repeat anything?

Mr. Lever: What causes the hon. Gentleman surprise is the obvious and only sensible rule that Governments can apply unless they want to supervise individually the contracts entered into by British businessmen.

Price Levels

Mr. Hunt: asked the Chancellor of the Exchequer whether, in the light of the 2·2 per cent. rise in the cost of living during April, he will now revise his estimates of the effect of the Budget and devaluation upon price levels.

Mr. Roy Jenkins: The rise in the retail price index between March and April was 1·8 per cent., not 2·2 per cent. The magnitude of the rise was allowed for in the forecast to which the hon. Gentleman refers.

Mr. Hunt: Is it not a fact that the right hon. Gentleman forecast a rise over the year of some 5 per cent.? How can the Chancellor justify a rise of almost half that level in a single month?

Mr. Jenkins: Clearly because by far the greater part occurred as a direct result of the indirect nature of the Budget proposals which I introduced. I gather that indirect rather than direct taxation commends itself to the hon. Gentleman's hon. Friends. At least that is what they have been saying in Committee.

Mr. Molloy: In this context, would my right hon. Friend be prepared, with his right hon. Friend the Minister of Agriculture and his right hon. Friend the President of the Board of Trade, to examine these increases, particularly in the confectionery and toilet retail sectors, which are causing some irritation?

Mr. Jenkins: These individual points are not matters for me, but I have no doubt that my right hon. Friends will take note of what my hon. Friends says.

Licensed Premises (Rating Assessment)

Dr. Winstanley: asked the Chancellor of the Exchequer if he will review the operation of the present method of basing the rating assessments of licensed premises upon barrelage.

Mr. Harold Lever: No, Sir. The method has been approved by the courts for many years and I am not aware of

any good reason for reviewing its operation.

Dr. Winstanley: Are we to deduce from that Answer that the Financial Secretary is wholly satisfied with the arrangement whereby the landlord's private residential rooms in a public house, which may amount to more than a third of the whole, are rated according to the amount of beer sold in the public rooms?

Mr. Lever: I am satisfied that this method of assessing the rental value of the premises as a whole is reasonable and fair, and the courts have so found.

Invisible Account

Mr. Maurice Macmillan: asked the Chancellor of the Exchequer what was the balance on invisible account in the last quarter of 1967 and in the first two quarters of 1968, respectively.

Mr. Roy Jenkins: There was a deficit of £10 million in October-December, 1967 and a surplus of £86 million in January-March, 1968—seasonally adjusted. Figures for the current quarter will be published in September.

Mr. Macmillan: Since these figures indicate a considerable improvement in the invisible balance, can the Chancellor tell the House why the same sets of figures show such a falling off in the current balance, and, further, whether this represents an increase in net private investment overseas?

Mr. Jenkins: I am not quite sure of the hon. Gentleman's terms. There was a deficit on visible account counteracted to some large extent by this near record surplus on invisible account. There was also a substantial deficit on long-term capital account, a large part of which was caused by an exceptional investment transaction by an oil company, and some of which was caused by an increase in private portfolio investment abroad.

Memoires of Convicted Persons (Payment in Foreign Currency)

Sir T. Beamish: asked the Chancellor of the Exchequer if he will amend the Exchange Control Regulations to prevent payments in foreign currency to convicted British traitors or their agents;


and if he will give details of all sums known to have been so paid in the past.

Mr. Roebuck: asked the Chancellor of the Exchequer whether he will take steps, by legislation or otherwise, to ensure that persons living abroad do not benefit financially from the results of criminal activities in this country, for instance, by the receipt of royalties from writings describing their alleged exploits.

Mr. Harold Lever: I do not think it would be right for the Treasury to seek to operate through exchange control a moral censorship. Nor would it be practicable; the attempt would involve individual scrutiny by the Bank of England of the thousands of payments to non-residents generally for literary work or other current purposes on the chance of picking out the few considered objectionable. The delays imposed on perfectly legitimate transactions would be intolerable.

Sir T. Beamish: What kind of logic or morals are involved when one has to go through the inquisition of a means test before a fiver can be sent to an impoverished aunt living abroad, whereas there is no difficulty whatever in sending several thousand pounds to a convicted British traitor living abroad?

Mr. Lever: The payments to which the hon. Gentleman takes exception, which are not attractive to any right hon. or hon. Member, are covered by a general permission. The only way of dealing with this matter to the hon. Gentleman's satisfaction would be to abolish the general permission or, within it, to search through tens of thousands of applications in the hope of finding the odd one that was a payment of this kind.

Mr. Roebuck: Is my hon. Friend aware that his reply is not as satisfactory as his letter to me on this subject on 5th June last? Is he aware that many millions of honest taxpayers in this country get very angry indeed when they read about such things as £10,000 tax-free going to spies? Will my hon. Friend look at this question again?

Mr. Lever: My hon. Friend must not talk as though these payments are made to spies for spying. These payments are made under a general permission for

literary and newspaper payments to be made. The only way in which I could control them would be to abolish this general permission and scrutinise each of the tens of thousands of applications individually, and the honest taxpayer would resent paying the cost of that far more than the dissatisfaction he feels at the money going to these thoroughly unworthy people.

Mr. Biggs-Davison: Is it really so difficult to pick out these very few cases? Thank goodness we do not have more than one or two traitors.

Mr. Lever: It is not a question of the number of traitors; it is the number of applications falling within this class. They amount to tens of thousands. It is not merely difficult, it is virtually impossible for me to pick out the two or three payments which are made per annum on this basis and segregate them from the others.

Mr. Arthur Lewis: Is it not a simple matter for the Chancellor to introduce a provision into the Finance Bill saying that no convicted criminal shall have money sent to him abroad?

Mr. Lever: I am afraid that when my hon. Friend has reflected on his simplist proposition he will not find that it commends the unanimous assent that he would suppose.

Taxation Proposals (Representations)

Mr. Evelyn King: asked the Chancellor of the Exchequer what representations he has received from the Inland Revenue staff associations regarding the complexity of his taxation proposals; and what reply he has given.

Mr. Harold Lever: I have received no such representations.

Mr. King: Does not that show how docile the staff must be? Is it not a fact that the incomprehensiblity of the proposals put forward by the Chancellor are causing difficulty even among the experts at the point of collection?

Mr. Lever: All tax systems are in one degree or another complex, and I have received no such representations of the kind implied by the question.

Capital Outflow

Mr. Dickens: asked the Chancellor of the Exchequer if he will seek to impose further restrictions on the outflow of capital to advanced countries within the sterling area.

Mr. Roy Jenkins: The voluntary programme already operates in this field and I have at present no proposals for further action.

Mr. Dickens: Does not my right hon. Friend agree that he is simply frittering away the advantages of devaluation by continuing to allow £190 million worth of capital to leave this country as it did in the first quarter of 1968, the highest figure in any quarter for the past 11 years? Will he now impose a standstill on the outflow of private capital to advanced countries like Australia, to which capital at the rate of £1 million a day has been flowing in the first quarter of this year, principally to buy Australian gold mining shares.

Mr. Jenkins: I think that my hon. Friend somewhat exaggerates the size of the problem when he refers to £190 million having gone out. As I said, this was to a large extent accounted for by one exceptional transaction. I agree that there has been some disturbing increase in the outflow of private portfolio investment by individuals to Australia in the first quarter, but I have to consider the position of the sterling area as a whole, and also the fact that this is not a net charge on the reserves.

Mr. Brian Harrison: Can we take it from the Chancellor's statement that he does not intend to limit portfolio investment by people resident in the United Kingdom taking shares in Australia?

Mr. Jenkins: I think that what the hon. Gentleman can take is exactly what I said, that the voluntary programme already operates, and at present I have no proposals for further action.

Mr. Macdonald: Is it not regrettable, but still a fact, that the admirable intent of the voluntary programme has not had trie fullest success hoped for, and therefore will my right hon. Friend think again about this matter?

Mr. Jenkins: I think that my hon. Friend is under a slight misapprehension. The voluntary programme relates to direct investments and to portfolio investments by institutions, and I think that it has worked satisfactorily.

Mr. Selwyn Lloyd: Does the right hon. Gentleman agree that in the interests of the standard of living in this country it is important that we should have some part in the wealth explosion which is taking place in Australia?

Mr. Jenkins: I think that it is very important to preserve a balance. Overseas investment can be of considerable advantage, but it must not be made at the expense of stultifying our home economy.

Mr. Barnett: I recognise the difficulties, but would not it be better to face the problem of breaking up the sterling area itself rather than allow this continuation of capital outflow at the expense of our own economy?

Mr. Jenkins: I have to consider this matter in the context of many other considerations.

Mr. Patrick Jenkin: Does the right hon. Gentleman accept that the mere act of devaluation has of itself rendered the restrictions on overseas investment that much less necessary, and will he resist the pressure from the benches behind him to tighten up still further the damaging policy he was following before?

Mr. Jenkins: I am not sure that I follow the hon. Gentleman's argument, but I take note of his final point.

Mr. Dickens: In view of the unsatisfactory nature of that reply, I am bound to give notice that I shall raise the matter on the Adjournment at the earliest opportunity.

Balance of Payments

Mr. Dickens: asked the Chancellor of the Exchequer if he will make a forecast on the balance of payments position in the second half of 1968.

Mr. Roy Jenkins: I do not wish at this stage to add to what I said on this subject in my Budget speech.
Since then imports have continued at a rather high level, though this seems


to have received some check recently. Exports have come well up to my expectations. Our net invisible earnings have done well. The first quarter saw some exceptional investment transactions but these will not affect the prospects for the rest of the year.—[Vol. 761, c. 253–8.]

Mr. Dickens: Does my right hon. Friend accept the National Institute's forecast of a deficit of about £200 million on current account in the second half of 1968, and will he look again at the question of reintroducing import controls to reduce the amount of manufactured and semi-manufactured goods coming to this country, especially since devaluation?

Mr. Jenkins: I always take note with interest and attention of the National Institute's forecasts. I do not necessarily accept them. I note that the Institute itself said that it was little if any more certain than those which they made last time, in other words, three months before, which forecast an entirely different outturn. I take note of them, but I do not necessarily accept them. I have nothing to add to what I have said on previous occasions about import controls.

Mr. Macleod: If the Chancellor is now relying on his main forecast for exports rather than the higher forecast, which I understood from his reply to an earlier question, and if imports are much higher than he expected—as we know they are— how can he possibly maintain that his forecast can work out for the second half of this year?

Mr. Jenkins: The right hon. Gentleman is not correct in assuming that I am necessarily relying on my main forecast. What I said to the hon. Member for Worthing (Mr. Higgins) was that I thought the position looked at least as good as the main forecast. It may turn out to be better, but there is no doubt that the high level at which our imports have run is higher than we would have hoped. This means that at any rate for the first half of the year the out-turn cannot be as satisfactory as we would have hoped, but I have nothing further to say about the second half of the year, and still less about 1969, for which I still believe we have every prospect of earning a very good surplus indeed.

Mr. Bruce-Gardyne: asked the Chancellor of the Exchequer whether it is

still his estimate that the United Kingdom will achieve a balance of payments surplus in the second half of 1968, and a surplus of £500 million in 1969.

Sir C. Osborne: asked the Chancellor of the Exchequer if his estimate that the balance of payments deficit will be eliminated by the end of 1968 still holds good; and what deficit he now expects for the current year.

Mr. Roy Jenkins: I have nothing at this stage to add to what I said on this subject in my Budget speech and in my Answer to a Question from my hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) earlier this afternoon.

Mr. Bruce-Gardyne: Does a very good surplus for next year mean more or less than £500 million? Is it not clear that we are heading for another massive deficit this year? Is the right hon. Gentleman satisfied that our overseas creditors are prepared to put up yet again with hope deferred from this Government?

Mr. Jenkins: I am satisfied that we are on the right lines and that it is essential to continue this strategy. I believe that we can achieve a surplus in the fairly near future, and a very good surplus, of the biggest size possible. Anyone is extremely foolish who thinks that he can predict this accurately within £50 million or £100 million, but a sizeable, very big surplus for 1969 must and will remain the main objective of our policy.

Sir C. Osborne: How can this course be justified and give the right hon. Gentleman satisfaction when again the Economist has calculated that we are running at present at a deficit of £1,300 million a year? How on earth can we have a surplus in the second half?

Mr. Jenkins: It was clearly understood that there would be a deficit in the first half, but we hoped to counteract this in the second half and then move into substantial surplus.

Mr. Frank Allaun: Would not a large part of the deficit be overcome if the Government ended their net overseas military spending across the exchanges of £232 million a year?

Mr. Jenkins: My right hon. Friend will be aware that, in January, we took


measures, which admittedly will take some time to work out, substantially to reduce our overseas military commitments and the burden which we carry in that respect for the first time since the war, to bring it into line with that of our main competitors in Europe.

Mr. Iain Macleod: Can the right hon. Gentleman give us a clear answer to this question, which he has ducked at least half a dozen times this afternoon? In his Budget statement, he said—I think that these were his words—that he "hoped and expected" a surplus in the second half of 1968 and a surplus of £500 million as soon as possible. Does he hold to that or not?

Mr. Jenkins: I said a surplus "of the order of £500 million", and I certainly hold to that as being an objective to which we must work as quickly as we can. I have every intention of continuing to make this a central objective of my policy, as, I believe, any Chancellor should.

Mr. Michael Foot: In view of my right hon. Friend's renewed assertion about achieving this excess on our balance of payments, does he agree with the statements made by his colleagues in recent days that the projected reduction in our expenditure east of Suez will enable us to increase our expenditure in Europe? Does he not think that this policy must be earnestly reviewed so that we continue to reduce our expenditure in Europe as well as east of Suez?

Mr. Jenkins: This raises very much wider issues, but it is certainly my view, as we have said and as my right hon. Friend the Prime Minister said in January, that it is necessary for us to bring our overseas military commitment as a whole into line with what we can afford.

Mr. Iain Macleod: The right hon. Gentleman has evaded the question once more. Does he or does he not, in his own words, "hope and expect" for a surplus in the second half of this year?

Mr. Jenkins: I certainly hope that we may achieve it in the second half of this year. Clearly, no one can predict this with certainty, and I have nothing firmly to add to the forecast which I gave in the Budget. It does not, from any point

of view, encourage the publishing of detailed forecasts if one is tempted to adjust them from week to week or from month to month.

Inland Revenue Offices (Hours)

Mr. Dudley Smith: asked the Chancellor of the Exchequer if he will provide improved facilities for the public wishing to consult their local income tax inspector by instructing offices of the Inland Revenue to remain open for longer hours and on Saturday mornings.

Mr. Harold Lever: No, sir. But interviews can be arranged by appointment outside the hours when offices are open to the public.

Mr. Smith: Does not the hon. Gentleman agree that Saturday morning closing in common with other public sectors places many people at a serious disadvantage, particularly when they have to take time off from work to attend interviews?

Mr. Lever: What the hon. Gentleman has failed to note is that I referred to interviews by appointment including on Saturday morning or other times when the office is closed. That is different from keeping the offices open in the hope that somebody might want to come in at those times.

Mr. Higgins: Is the hon. Gentleman aware that if one rings up the Inland Revenue offices in London one does not get a reply after 4 p.m. and one can try for a long time before one realises that the calls are not being answered? Would it be possible for them to make arrangements for a recorded message so that people are told that no officer is available after 4 o'clock?

Mr. Lever: I shall inquire into that.

Mr. Dobson: Will my hon. Friend note that many elderly people would like the facility of having a tax inspector visit them at home to discuss their tax affairs, as they are extremely perturbed at having to attend before a tax officer to go through their private affairs with him? Does my hon. Friend think that that might be the answer to the problem?

Mr. Lever: I am not sure how widespread the demand is for receiving tax officers in the homes of citizens, but I


am afraid that the achievement of that must await a more Utopian form of society than we have at present.

Crosby Spring Interiors (Dividend)

Mr. Tilney: asked the Chancellor of the Exchequer why the Treasury recommended that the dividend by Crosby Spring Interiors of 28½ per cent. for the year to 31st March, 1968, should be cut to 28·4625 per cent., thereby reducing the distribution to the shareholders from £61,479 to £61,398.

Mr. Taverne: The company agreed to confine the increase proposed in its dividend to 3½ per cent. above the amount for the previous year.

Mr. Tilney: For the sake of accuracy, the reduction is of £81 to the first named figure. Is this the best use of Treasury brain power?

Mr. Taverne: This is a difficult problem. I realise that the adjustment here was a minor and, in many ways, an irritating one, but it would increase the difficulties enormously if one started arguments about how much above the permitted maximum a particular company was allowed.

Inland Revenue Administration (Scotland)

Mr. Eadie: asked the Chancellor of the Exchequer how many representations he has received regarding the working of the Inland Revenue administration in Scotland; if he is satisfied with the present administration; and if he will make a statement.

Mr. Harold Lever: None, Sir. I think the present arrangements work satisfactorily.

Mr. Eadie: Is my hon. Friend aware that this question is prompted by the fact that my mailbag at least contains a large increase of protests about the machinations of the Inland Revenue in relation to people's Income Tax? Does my hon. Friend not find that, in general, that is the position?

Mr. Lever: Enthusiasm for the activities of the Inland Revenue is not widespread either in England or in Scotland, but I believe that the present system is well understood and works efficiently.

None the less, if my hon. Friend has any specific suggestions on how it might be improved, I shall be glad to consider them.

Selective Employment Tax

Mr. Eadie: asked the Chancellor of the Exchequer how many co-operative societies and kindred organisations in Scotland have made written representations to him regarding the effect of the Selective Employment Tax.

Mr. Taverne: Twenty-two.

Mr. Eadie: Is my hon. and learned Friend aware that the kind of answer given to these organisations is not deemed very satisfactory? Can he give any idea of when the Reddaway Committee will give some report on S.E.T.?

Mr. Taverne: I realise that this is not very satisfactory to co-operative societies, but, with the best will in the world, it is impossible to treat them differently from other distributors. It is expected that the Reddaway Committee, which was set up especially to look at this tax, will complete its inquiry in the early part of next year.

HOUSE OF LORDS (LEGISLATION)

Ql. Mr. Whitaker: asked the Prime Minister if he will now make a statement on his proposals to introduce legislation to reform the House of Lords.

The Prime Minister (Mr. Harold Wilson): I would refer my hon. Friend to the statement which I made to the House on 20th June.—[Vol. 766, c. 1314–28.]

Mr. Whitaker: But is it not only fair that we treat their Lordships' views with all due respect, in particular their resilution of March, 1910, when they said that hereditary peers should no longer sit or vote in that Chamber? Can we, therefore, no longer frustrate their wishes but bring in legislation this Session?

The Prime Minister: All relevant considerations, including expressions of opinion as long ago as 1910, will be taken into account.

Mr. Maudling: Can the right hon. Gentleman tell us when he expects to have this legislation on the Statute Book?

The Prime Minister: No, Sir. I am not in a position to add to what I said last week about the timing of the Bill.

Mr. William Hamilton: In view of the wrecking activities in the other place yesterday, will my right hon. Friend consider the possibility of extending the current Session so that we can deal with this matter forthwith?

The Prime Minister: I do not think that it is appropriate for me to comment on a single day's activities on a Bill which has gone from this House to another place. No doubt we can consider all these questions in due course.

Mr. Tapsell: Has the right hon. Gentleman noted that his belligerent attitude to the House of Lords is almost universally regarded as irrelevant to our present national problems and as a deliberate attempt to divert attention from them?

The Prime Minister: I have heard that some hon. Gentlemen think this, but the hon. Member will recognise that the initiative in this matter last week was not taken on this side of the House.

Mr. C. Pannell: Is my right hon. Friend aware that his statement last week on the House of Lords was pitched in a highly responsible tone which is out of keeping with the derisive treatment which should be accorded to it?

The Prime Minister: I always believe, on such occasions, in taking refuge in understatement.

Mr. Sandys: While the need to reform the position of the Second Chamber is generally accepted, does not the Prime Minister realise that, by attempting to alter our Parliamentary constitution without all-party agreement and without referring his proposals to the electors, he is setting a very dangerous precedent?

The Prime Minister: No, Sir. This has already been before the electors twice. As for all-party agreement, there was every opportunity on this all-party committee which was wrecked by the tactical manoeuvre of right hon. Gentlemen opposite.

Dr. Winstanley: While recognising that the House of Lords is out-of-date, unrepresentative, undemocratic and—per-

haps worst of all—Tory, and while reiterating our support for this reform, may I ask the Prime Minister at the same time to recognise that it would be unfortunate if the preoccupation with this reform, both here and outside, were to divert attention from the very real problems which are at present facing the nation?

The Prime Minister: I always feel that it is good when someone like the hon. Gentleman can approach the problem in such an objective way, as his choice of words showed. There is no question of this necessary reform interfering with what must be the first priority for any Government in the present circumstances, and that is the economic situation.

Mr. Emrys Hughes: Is my right hon. Friend aware that, when we come to dealing with the House of Lords, the guillotine will be necessary? Will he see that it is ready and sharpened up for the occasion?

The Prime Minister: I will see that my hon. Friend is provided with suitable knitting.

Mr. Maudling: What possible reason can the right hon. Gentleman have for saying that the inter-party discussions on the future of the House of Lords were wrecked by the constitutional action of the present Chamber?

The Prime Minister: For the reason I gave last week; that this was quite clearly a manoeuvre which began in this House.

MINISTER OF TECHNOLOGY (SPEECH)

Sir Knox Cunningham: asked the Prime Minister whether the public speech delivered by the Minister of Technology to the Welsh Council of Labour at Llandudno on 25th May about Parliamentary reform is in accordance with the policy of Her Majesty's Government.

The Prime Minister: I would refer the hon. and learned Gentleman to the Answers I gave to similar Questions on 29th and 30th May and on 11th June.— [Vol. 765, c. 241–2; Vol. 765, c. 259; Vol. 766, c. 29–30.]

Sir Knox Cunningham: Since the Minister of Technology is so keen on reform, as the Prime Minister appears to be about another place, will he widen his horizon to include the present Government, who have suffered more by-election defeats and who are the most distrusted and detested Government of this century?

The Prime Minister: The hon. Gentleman is, of course, entitled to his views, but they are not very widely shared— [HON. MEMBERS: "Oh."]

Sir Knox Cunningham: That's what you think.

Mr. Faulds: Go home, foreigner. Go home. [Interruption.]

Mr. Speaker: Order. The hon. Member for Smethwick (Mr. Faulds) must learn to behave properly.

The Prime Minister: I do not think that the hon. and learned Member for Antrim, South (Sir Knox Cunningham) expressed quite so fulsome a view when a whole series of by-election defeats faced his party when it was the Government; although he was, of course, speaking from his safe base in Northern Ireland.

PRESIDENT DE GAULLE

Mr. Marten: asked the Prime Minister if he will now invite the President of France to visit this country.

The Prime Minister: I would refer the hon. Gentleman to the Answer I gave on 2nd April to a Question by my hon. Friend the Member for Lancaster (Mr. Henig).—[Vol. 762, c. 47.]

Mr. Marten: In the light of recent events in France, would it not be wise for the right hon. Gentleman to have direct talks with the President to learn straight from him how discontent in a country can quickly lead to rioting?

The Prime Minister: I do not think there is any need at the present time for me to have talks with the French Head of State. As to the question of rioting, student power, and so on, the hon. Gentleman will have noticed how a certain visitor from France to this country was cut down to size when he got to Britain.

Mrs. Ewing: Is the Prime Minister aware that this is the 800th year of the "Auld Alliance" between Scotland and France and that, by right of law, General de Gaulle can claim citizenship of Scotland. [An HON. MEMBER: "You can have him."] Will he therefore invite General de Gaulle to visit Scotland before the year is out in the hope that the good will engendered will overflow in the direction of the Prime Minister?

The Prime Minister: I note what the hon. Lady says, but I have no doubt that the President, whose sense of history is as least as great as hers, will have noted that this is the 800th anniversary.

IMPORT SUBSTITUTION

Mr. John Fraser: asked the Prime Minister what is the policy of Her Majesty's Government on the extension of public ownership as a contribution towards their policy of import substitution.

The Prime Minister: Her Majesty's Government are prepared to support any measures, whether within public or private ownership, which contribute to this end, provided that they are fully consistent with our international obligations.

Mr. Fraser: Would my right hon. Friend agree that the present level of imports shows that private enterprise has not responded to the policy of import substitution, despite all the incentives available? Will the Government redouble their effort in public enterprise to show private enterprise what can be done?

The Prime Minister: I think my hon. Friend will see from the evidence that a number of firms in private enterprise have taken rapid advantage of the new competitive situation as regards import saving. By far the most spectacular results have been achieved in export orders, but I would not underrate what a large number of firms, both in the private and public sphere, have done in the matter of import saving.

Mr. Heath: Is the right hon. Gentleman aware that since the nationalisation of the steel industry, imports of steel have gone up, have nearly doubled, and that exports have gone up by only a comparatively small, certainly a lesser,


amount? Is not this a strange contribution towards import substitution?

The Prime Minister: The right hon. Gentleman will be aware that in the last few months, particularly since steel was nationalised, there has been a period of excess steel supplies throughout the Western world. There have been suggestions of dumping, and these will be looked into.

KING OF GREECE

Mr. John Fraser: asked the Prime Minister if he will make a statement on his meetings with the King of Greece on his recent visit to this country.

The Prime Minister: My met ting with the King of Greece on 27th May was both private and informal, Sir.

Mr. Fraser: Did my right hon. Friend discuss with the King of Greece the Labour Party conference resolution about Greece—[Interruption.]—why not? —which called for the expulsion of Greece from the Council of Europe and from N.A.T.O. in an effort to restore democracy? Did he give the King of Greece any indication that we would move in the near future for the expulsion of Greece if democracy is not restored?

The Prime Minister: No, Sir. We did not get round to that resolution in what was otherwise a very long and fruitful discussion. The King of Greece is in no doubt at all about the attitude of Her Majesty's Government in connection with the dictatorship in Greece and about some of the bestialities which have been perpetrated there. We are counting on the assurance given to us and to our other N.A.T.O. allies and Council of Europe colleagues about the timetable for a return to constitutional rule. If that is not fulfilled, Her Majesty's Government, together with their allies, will get very impatient.

GIBRALTAR

Mr. Molloy: asked the Prime Minister if he will visit Gibraltar and invite leaders of the Gibraltarian community to Great Britain.

The Prime Minister: I have, Sir, and so have, more recently, others of my right

hon. Friends. The Chief Minister and Deputy Chief Minister of Gibraltar will be coming to London in early July and my noble Friend the Minister of State for Commonwealth Affairs will be going to Gibraltar for constitutional discussions later in that month.

Mr. Molloy: Would my right hon. Friend consider going to Gibraltar as well, since such a move would demonstrate the feeling of the people of these islands for our friends and colleagues in Gibraltar?

The Prime Minister: I do not think that the people of Gibraltar are in any doubt about the universal feeling in this country about their future. My right hon. Friend the Secretary of State visited Gibraltar last month, and I visited Gibraltar some little time ago.

Mr. Maxwell-Hyslop: Would not the right hon. Gentleman agree that the people of Gibraltar have enough to put up with, without a visit from him?

The Prime Minister: That was not the response they gave me when I was there. In fact, whatever the hon. Gentleman may say, they would certainly not want to see a representative of a Government which tried to sell frigates to Spain.

RHODESIA

Mr. Biggs-Davison: asked the Prime Minister what is the result of his investigation into allegations that British passports have been issued to terrorists engaged in subversive activity against Rhodesia.

The Prime Minister: I would refer the hon. Gentleman to the Answer I gave on 11th June to a Question by my hon. Friend the Member for Fife, West (Mr. William Hamilton).—[Vol. 766, c. 27.]

Mr. Biggs-Davison: Has the right hon. Gentleman discovered how many passports have been issued to persons so that they may travel to Russia, China, Algeria and such-like countries for the purpose of being trained for guerrilla warfare against Rhodesia?

The Prime Minister: No, Sir. It is not possible to make such an estimate. In the cases publicised in the Daily Express a month ago, to which I referred


at the time, it was the regime which provided the men with illegal travel documents. Our policy is to deny them to known terrorists; and any information about known terrorists would lead to a failure to issue passports, which are, in any event, issued in the first instance for six months.

Mr. John Lee: Will my right hon. Friend withdraw the passports of those who have given aid and comfort to those who are committing treason in Rhodesia?

The Prime Minister: No, Sir. The general position in regard to passports has been debated in the House, and it was the subject of a statement made by my right hon. Friend last week.

Mr. Gresham Cooke: How is it established whether a political refugee from Rhodesia is or is not going to be a terrorist?

The Prime Minister: That is the difficulty. There have been allegations made by Mr. Smith that some of those who have been granted passports, including those given travel documents by him, have turned out to be terrorists. We will look into any case that is drawn to our attention, but it is impossible to say that a man who can prove that he is a British citizen looks like or does not look like a terrorist; that is, unless one has evidence about him.

Mr. Speaker: Mr. Faulds. [Interruption.]

Mr. Faulds: I always welcome that sort of opposition. Would it not be wiser, to expedite the solution of the Southern Rhodesia problem, for us to take the necessary military action ourselves or aid and arm those who are willing to do the fighting? Is this not now the only way of preventing a racial war along the Zambesi?

The Prime Minister: No, Sir. I certainly do not take the view that this should be settled by force on our part, and I do not believe that there will be any lasting solution for Rhodesia based on force on either side there.

POPULATION

Sir D. Renton: asked the Prime Minister whether he will cause an investigation to be held in order to estab-

lish what should be the optimum size of the population of England, Wales and Scotland, respectively.

The Prime Minister: I would refer the right hon. and learned Gentleman to the Answer given on 30th April by my right hon. Friend the Minister of Health to a Question by my hon. Friend the Member for Bebington (Mr. Brooks).—[Vol. 763, c. 986–7.]

Sir D. Renton: Did not that Answer indicate that no such studies were taking place? In view of the very large increase in population expected from now to the end of the century, should not such studies now begin in order that planning of land use may be rational and high living standards may be maintained?

The Prime Minister: We are in fact making studies on this question. As the right hon. and learned Gentleman knows, I do not share his extreme pessimism on on this matter, but I agree about the importance of the subject and we are studying the information available to us.

RAILWAYS (DISPUTE)

The Minister of Transport (Mr. Richard Marsh): With permission, I should like to make a statement.
My hon. Friend the Joint Parliamentary Secretary undertook yesterday that we would keep the House informed of any developments taking place in the railways dispute. There has been a change in the situation in that, as the House will know, the locomotive men's union— A.S.L.E.F.—has now joined in the industrial action a week earlier than they had originally proposed. The A.S.L.E.F. action has not so far had a significant additional effect on the operation of the railways.
The action which started yesterday is, however, still causing considerable disruption, principally from the closure of signal boxes and level crossings. These impose serious limitations on railway working. Nevertheless, the commuter services into London on the Southern Region, where passengers faced most delay and discomfort yesterday, worked rather more easily this morning. But there were fewer passengers.
To help those who came in by car the fullest use is being made of tidal flow


traffic regulations; there are extra car parks in central areas and charges at meters in central London are suspended. Insurance companies have given their usual assistance to those requiring immediate extra cover in present circumstances, but free lifts have, as usual, been at passengers own risk.
Looking at the freight side, the picture is of reduced operations—and certainly not chaos. Special arangements for the transport of milk from the West Country and Wales, meat, fresh vegetables and fruit have all worked well while there has been no difficulty so far with freight-liners—which are running normally—or the mail. Bulk transport of coal has been slowed, but we have very large stocks at power stations and the position gives no rise to anxiety.
But we must remember that of the 200 million tons or so of goods moved by rail a year some 120 million is in small units: the more urgent elements of this, at least, can switch to road—and are doing so. We must remember that this traffic is slight by road standards: some 1½ thousand million tons or so move by road a year.
There is discomfort and inconvenience for many innocent people in getting to work, but the economy of the country is certainly not being throttled. Priority is being given to exports and the Government will continue to keep essential services going. It is the passengers who suffer now, but it is the railways and railwaymen who will suffer in the longer term if this unnecessary dispute continues.
Let me make the position clear. We cannot continue with ever-increasing railway deficits. Under the financial restructuring proposed in the Transport Bill, from 1st January the Board will no longer have the safety net of a general deficit grant. It will be standing on its own feet financially and I want to make it clear that it is quite out of the question for any settlement of this dispute to be reached on any basis other than one which the Board is satisfied it can afford.
I can only repeat what my hon. Friend said yesterday: the Government hope that the two unions will accept the unanimous award of the Railway Staff National Tribunal and get down as quickly as possible to substantive negotiations with the Board on the pay and efficiency agreements. These can yield quick and substantial pay

increases for railway workers—ranging up to 30s. per week. Yesterday, the Board sent over to the unions proposals for the train-men so there are now before the two unions proposals which would cover virtually all their staff and bring great benefits to them and to the Railways Board.
The Board has asked them to come and talk. I have heard, within the last hour, that the Transport Salaried Staffs Association has accepted the pay and efficiency proposals for its members. It is my hope, and, I am sure, that of the House, that the other unions will respond to the offers made to them.

Mr. Peter Walker: Is the right hon. Gentleman aware that we on this side of the House welcome the news that the Transport Salaried Staffs Association has accepted the pay and efficiency proposals and hope that in the near future the other two unions will follow that example?
We welcome the Government's decision to recognise that it is vital that this dispute should be settled on a basis which the Board can afford. We also welcome the adherence to the view that the two unions concerned should adhere to the unanimous decision of the Tribunal, upon which there is a very distinguished trade union member.
May I ask two questions, which were asked yesterday, about the provisions being made? One is on the position of season ticket-holders who have to use alternative forms of transport. Is there any possibility of their season tickets being valid for this purpose?
Secondly, on the parking restrictions, very few people know the exact boundaries of Tower Hamlets and other such London boroughs. Would it not be possible to make these facilities available in all London boroughs?

Mr. Marsh: I am grateful to the hon. Member. As he said, both questions were asked of my hon. Friend yesterday. He gave an undertaking that we would look into the possibility of both of them. This is being done and I shall let the hon. Member know as soon as we have the answer.

Dr. John Dunwoody: In view of the almost complete stoppage of main line traffic to such peripheral parts of the country as Devon and Cornwall, will my


right hon. Friend make special arrangements for industrial and agricultural produce to be brought out of those areas?

Mr. Marsh: I recognise the special problem of the West Country at present. I repeat what I said: there is no evidence so far that freight traffic is, in fact, suffering particularly unduly. Freightliners are running full out. For the transport of goods there are alternative means and a large proportion of these goods are still being transported.

Mr. G. Campbell: Do not the last words spoken by the right hon. Gentleman about the transfer of freight from rail to road illustrate the folly of imposing on industry the restrictions in the Transport Bill on alternative road transport, with complicated and time-wasting procedures?

Mr. Marsh: The hon. Gentleman is returning to a well-tried theme. I can only say that no restrictions are placed on the transport industry in the Transport Bill in terms of road haulage except in so far as British Railways can provide a service as good or better in terms of cost, reliability and speed. The present situation is one of the things which will be argued against the industry.

Mr. Winnick: Is my right hon. Friend aware that in view of the chaos so far caused, certainly on the Southern Region, everyone will hope that negotiations can be started again at the highest level? Will he accept that unless the railwaymen felt that they had a deep, long-standing and justified grievance they would not have begun the action they took in the last few days?

Mr. Marsh: I think that the position is very much more complex than that. We have a situation in which negotiations were referred to arbitration and the arbitration board unanimously came down as being opposed to the agreement. The Railways Board is perfectly willing to meet the unions at any time and has put forward proposals in the very recent past. I can only hope that the two sides will get together to reach an agreement, because it cannot be to anyone's interest —least of all the interests of railwaymen and the industry—to prolong this dispute. All, on both sides, should recognise that.

Captain Orr: In view of the vulnerability of the Northern Ireland economy to any failure in sea or rail transport, will the right hon. Gentleman keep a special eye on this situation?

Mr. Marsh: There is, I understand, at the moment no evidence of dislocation of sea services, but the whole situation has to be watched very carefully.

Mr. Roy Hughes: Does my right hon. Friend agree that this dispute has at least shown that the operation of systematic overtime working is a very poor way to run a railways system?

Mr. Marsh: Of course, the answer to this is to pay rates of pay which encourage men into the industry. There are, I repeat, available increases of up to 10½ per cent. and more for the asking for the men in this industry.

Mr. Lubbock: Is the right hon. Gentleman aware that everyone welcomes the statesmanlike attitude of the T.S.S.A., which set such a good example to the N.U.R. and A.S.L.E.F.? Does he feel that if the solution were put to the membership of these two unions they would be disposed to accept it, whereas the leadership have declined to do so?
May I ask the right hon. Gentleman what additional measures he will take to ensure the free flow of traffic in Greater London, and whether he can make available additional parking spaces and extend the restrictions on waiting during the rush hours in the morning and evening?

Mr. Marsh: Most of this has already been done. We are examining the position with the police and local authorities to see what more can be done. On the question of the general dispute, I think that it would be a mistake for the House either to over-simplify the problem in relation to the unions, or, if I may say so, to get too deeply involved in inter-union differences. It is a very complex set-up. Having put the case, it is better that the unions together should come to an agreement with the Railways Board, as I am sure they are able to do.

Mr. Robert Howarth: Would my right hon. Friend please note that it is not just in the Southern Region where there are special problems? Many Lancashire


towns, including my own constituency, start their holiday fortnight this weekend, and are already faced with severe difficulties caused by the dispute. Is it possible to give instructions to the Railways Board to have a look at this problem?

Mr. Marsh: I am sure that the Board will have taken note of the problem raised by my hon. Friend, but, obviously, a dispute of this sort is bound to cause inconvenience to large numbers of people. This cannot be avoided. The only answer is to reach a settlement as soon as possible.

Sir J. Rodgers: Does the right hon. Gentleman realise that certain sections of the community suffer much more than others, particularly my own constituency, where about 30 per cent. commute to London? Will he therefore take urgent steps to try to start negotiations?

Mr. Marsh: It must be clear that the dispute is now in its second day, and that there has been no stoppage of negotiations. The two sides consist of very rational people. They have not as yet been able to reach agreement, but they are in contact and offers are being made. This is the only answer to the problem.

Mr. Spriggs: Is my right hon. Friend aware that while prices continue to rise the workers in the industry are bound to try to maintain the real value of wages?

Mr. Marsh: I am very much in favour of them maintaining the real value of wages and increasing them, but I repeat that this is an industry where increases are available at present of 10½ per cent. and more. I would like to see these men paid more. It is a question of reaching an agreement; but the amount paid out has to be paid for by somebody, and under the Transport Bill there is no longer a method by which the Government can make money available.

Mr. Gresham Cooke: Would the right hon. Gentleman look into the particular complaint of my constituents, who are struggling hard to get to the City via Waterloo? It is that while the parking concessions in central London may be good, those in the City are inadequate. The City should do more by way of parking concessions to enable people to motor into the City.

Mr. Marsh: The hon. Gentleman is clearly the chairman of the "National Society for the Prevention of Cruelty to Civic Commuters". I will look into the matter he raises to see what can be done.

Mr. Bagier: I am sure that my right hon. Friend would not like to oversimplify the situation by saying that there is 10½ per cent. for the taking. Would he not agree that one of the basic problems is that productivity deals have in the past meant, and probably will in future always mean, a sharp cut-back in the number of staff employed, leading to redundancies?

Mr. Marsh: I certainly would not want to over-simplify this matter. It is a very complex issue, on all sides. What will endanger the security of these men more than anything is a falling off in the performance of British Railways, just at the time when they have a golden future. I certainly agree with my hon. Friend that it is a very complex issue.

Sir C. Osborne: Would my hon. Friend agree that the longer the dispute lasts the greater is the danger that the traffic being lost from the railways to the roads will never go back to the railways, thereby making the position of the railway workers worse? Cannot he get that over to the unions?

Mr. Marsh: As my hon. Friend said previously, the position is more complex than that. Now that the railways have had their deficit removed, they are starting with a clean sheet. They have an enormous opportunity in the future, and the extent to which their finances and their economies are endangered at the present time cannot be of any benefit to the railwaymen.

Mr. James Hamilton: Is my right hon. Friend aware that if a signalman goes off sick he receives more for being off sick, if he has a family of two, than for working? With that in mind, does he agree that now is an opportune time to introduce a minimum wage which, at present, is about £16 a week?

Mr. Marsh: The question of a minimum wage is not for me. I repeat, these negotiations are between the Board and the unions. I am sorry to be tedious in terms of repetition, but there are


sizeable increases available which cannot be made available under the present system unless either there is an increase in productivity which has to be negotiated in order to pay for it, or, alternatively, a further increase in fares. There is now no method of deficit financing.

Mr. Edward M. Taylor: Can the right hon. Gentleman say how many specific productivity proposals have been put to the unions during the course of negotiations and how many have so far been accepted? Could the Minister also say what is the situation in regard to rail movement in Scotland?

Mr. Marsh: The position of commuters in Scotland was this morning somewhat better than it was yesterday. Speaking from memory, in Glasgow yesterday the commuter stoppage was about 75 per cent. and today, I think, it is about 50 per cent.
In reply to the hon. Gentleman's first point, many proposals have been made backwards and forwards, on both sides. If I may say so with respect, the House would help no one if it started taking sides in the middle of negotiations. Both sides have made many proposals, and so far neither side has been able to agree with t'other. I can only hope that situation will not last for long.

Mr. Manuel: Is my right hon. Friend aware that the railway industry is low-paid and that the basic proposal affects only the lowest of the low-paid workers? This raises big problems with the trade union leadership which I hope he appreciates.

Mr. Marsh: I appreciate the problem very much; it is a serious one. As I said, yesterday the Board sent to the unions proposals for the train-men, so there are now proposals before the two unions which would cover virtually all their members. The difficulty is the major point which has to be faced: where does the money come from? It cannot now come from deficit financing and, if this is so, it can only come from increased productivity. The Board's proposals are designed to meet this problem. I am certainly in favour of seeing the railwaymen get more money.

Mr. Bidwell: May I draw my right hon. Friend's attention to the sympathy which was shown to the railwaymen's immediate case in the House yesterday and ask him, in the event of stalemate remaining and keeping the two sides apart, whether he personally will intervene to try to bring the two sides together so that negotiations can continue?

Mr. Marsh: There is no reason why these two groups of very experienced negotiators cannot settle this themselves. They know more about the industry and the problems than any outside bodies, and have had a lot of experience of negotiations together. I am in no doubt at all that, given good will on both sides, which has always been there in the past, they can find their way out of this difficulty.
In the end, of course, it is British Railways who have the job of finding the money and managing the industry. I have complete confidence in the ability of the negotiators on both sides to get themselves out of what is an incredibly difficult situation for both of them.

REPRESENTATION OF THE PEOPLE

3.50 p.m.

Mr. Evelyn King: I beg to move,
That leave be given to bring in a Bill to strengthen the links which ought to exist between Parliament and People.
I suppose that we all recognise how conformist is the influence of the Palace of Westminster and how rapidly even the youngest hon. Member begins to assume that what is now is what must be right. It is, therefore, good that sometimes these conformist opinions should be challenged.
For that reason, I was glad to see the Minister of Technology declaring that Parliament could not go on in its present form for ever and that marking a ballot paper with a cross every five years was insufficient. Indeed, he even said that if there was not a change there could be bloodshed, though I regret that he should have referred to bloodshed. However, I thought that the discussion was worth opening. I suspect that few of us, including even the Prime Minister, are


friends of referenda. However, I range myself on the side of change. 
We now have five-year Parliaments although, in the long eye of history, we have had them a short time. Following Stuart abuse of the system, it was in 1694 that three-year Parliaments were introduced. In 1715, there were seven-year Parliaments. Then there was the Parliament Act of 1911, which not only abated the power of the Upper House, but, as part of a package deal, also reduced to five years the length of a Parliament in order to restrain the Lower House. In the context of the Prime Minister's current proposals, when we are allowed to know what they are, I suggest to hon. Members that here is a precedent. In both Australia and New Zealand there are still three-year Parliaments, and the system works well. Tasmania has five-year Parliaments, reducible to three in certain circumstances. I suggest that that is a device which has much to commend it.
We must recognise that, since 1911, communications have strengthened and public opinion has become much more volatile. In 1968, there is evidence of growing dissatisfaction, world-wide in character but evident in England from by-elections, polls, strikes, student unrest and demonstrations, and Scots, Welsh and even Cornish nationalism. I suggest that each of these bears witness to the feeling of our people that they are too little able to participate in our decisions, that they feel remote from the nature of our discussions and, perhaps above all, are asked for their opinions too infrequently. We ought not to disregard that evidence, because an unrepresentative Parliament long continued is a mischief.
In the 19th century, the Queen had some influence on the date of a Dissolution. That is no longer substantially so, nor can it be revived. In the United States, there is the Supreme Court. We have no equivalent. There are those who believe that in certain circumstances the House of Lords has a large function in this context. That view is now opposed.
If we in the Commons deny influence to any other constitutional organ, then, in equity, the remedy must lie with ourselves. If the hon. Member for Fife, West (Mr. William Hamilton) were pre-

sent, I would say to him that those who are the first to wish to diminish the influence of the Upper House must also be the first to devise an alternative remedy. It is for them to attach to that ringing phrase, "representation of the people", a real meaning and show that we intend it in deed and in fact.
It might be supposed that those arguments would lead me to a demand to follow Australia and New Zealand and have three-year Parliaments. I do not altogether take that view. We all recognise the need for any Government to take firm and sometimes unpopular actions, and a wise Government of any party will face the nation with the less popular part of their legislative programme while their mandate is fresh and their image untarnished.
Mr. Gladstone took the view that, if mid-term by-elections or other evidence showed demonstrable unpopularity, it was the Government's moral duty to consider resignation. But Mr. Gladstone was considering only confidence at home. We now have to consider our credit abroad and our foreign policy overseas, both of which are weakened by a lack of confidence at home. Nor was it then necessary, as it now is, for a confident and strong Government to dominate in the sphere of industrial disputes. In this decade, a weak Government, because they are weak—whatever the reason for their weakness—can effect economic disaster.
There have been occasions when a British Government have sought a General Election not because of a Parliamentary defeat, but because their Administration has been discredited and because their continuance in office, with all the repercussions which I have tried to describe, was contrary to the national interest. Such occasions are rare, but they exist. How is such a point in time to be identified? That is our problem.
My Bill would provide that the normal run of a Parliament would continue to be five years, subject to one small proviso. If, during the first three years, there are no less than 20 by-elections in which the average swing away from the Government has exceeded 15 per cent., then, before the commencement of the fourth year, a new Parliament will be called. Such a position has not yet arisen and it may be that it never will. It has not arisen at any time in the last 50 years,


and probably longer. But should we not take precautions? It could arise during 1969.
If it were to do so, it could only be because the Government have less support than any Government in living memory, that their discredit is total and that they have been discredited over a period of years, with all the dire results which would follow therefrom both at home and abroad. It may be argued that, if such exceptional circumstances were to arise, a Prime Minister could be depended upon to take appropriate action himself. Equally, it can be argued that so great a load of responsibility is too heavy for any one man to bear and that it should be removed from his shoulders. If my Bill were approved, the representation of the people, which we in this House all seek to maintain, would be reassured not by the decision of any individual, but by the impartial nature of statistical facts accurately computed.

3.57 p.m.

Mr. Raymond Fletcher: I rise to oppose the Motion. I am still not very clear what it is that I am opposing. The rather sketchy outline of the projected Bill seemed to be nothing more than an elongated demand for a General Election more appropriate for a Question to the Prime Minister than for a Private Member's Bill.
If I were to give reasons why we should not have a General Election now, and do not need a General Election now, and why I think that the result of a General Election now might provide some shocks to the hon. Member for Dorset, South (Mr. Evelyn King), I should not be talking to this Motion, which I am rather anxious to do.
When we in this House debate how we represent the people, the precise machinery by which we are elected and the forms in which we carry out our duties as representatives, we seem to go through cycles lasting about 30 years. The last occasion when this House was really excited about the problem was in the 1920s, when there was a rash of Private Members' Bills. Some of them were very peculiar Bills and could not be anything other than peculiar being sponsored mainly by Conservative hon. Members.
There were proposals to restrict the franchise, to deny the vote to former conscientious objectors, to deny the vote to people who were naturalised citizens, and I believe that there was one proposal, considered in 1928, at Cabinet level, to deny the vote to paupers. Many of these Measures were instigated by private Members, but only one succeeded. It is rather an interesting commentary on the way that the House tends to produce results to note that a Private Member's Measure in 1927, which was accepted by accident by the very Conservative Home Secretary and nearly produced riots in the Cabinet, extended the franchise to women at the age of 21.
Most members of the then Cabinet were as agitated as the hon. Gentleman seems to be agitated now. Certain members of their Lordships' House were even more agitated. Early in 1927, Lord Birkenhead wrote to Lord Irwin saying:
The Cabinet went mad yesterday and decided to give votes to women at 21.
It was argued in Cabinet—we have Sir Winston Churchill's testimony to this effect—that the other members of the Cabinet strongly objected to the undue influence exercised upon Sir William Joynson-Hicks by that dynamic character Lady Astor. Hypnotised by that remarkable lady, Sir William conceded what his Cabinet colleagues said he should not have conceded. In the words of Sir Winston Churchill, never was so great a change in the electorate achieved so incontinently.
I rather think that when we debate a Motion of this kind—in view of my attitude to the next business, I should be happy to debate the Motion for the next two days—we should try to avoid the eccentricities of those who occupied the House in the 1920s.
The basic charge that the hon. Gentleman levelled against this side was that we are unpopular. If unpopularity is a crime it carries with it its own punishment, and, therefore, there is no need for any other. If unpopularity alone is an indication that those who incur it and who perhaps deserve it are no longer fitted to exercise effective authority anyhow, it is a very strange doctrine indeed and it comes even more strangely from the Opposition. I might take it and argue against it if it came from Mr. Cohn-Bendit, or even Tariq Ali, but it comes


rather strangely from a Conservative Member.
Consider the record. Sir Winston Churchill was not always as popular as he eventually became. In 1922, he suffered a terrible misfortune in his own eyes: he was defeated at Dundee by what Sir William Gilbert would have called that singular anomaly, a prohibitionist. I could imagine that Sir Winston must have considered this the most unkind cut of all. Two years later Sir Winston sustained a similar defeat in rather ignominious circumstances not too far away from the Palace of Westminster itself. Throughout his life he had to face those two imposters—triumph and disaster— with equal fortitude.
If popularity is the only thing that confers legitimacy either on a Government or on a member of a Government, let us consider this unpalatable fact from history. Probably the most popular Member who ever sat in the House was Mr. Horatio Bottomley; he enjoyed enormous popularity until an enterprising journalist revealed that he was a swindler. Another highly popular character in British political history was Lord George Gordon, who enjoyed the undiluted enthusiasm of the London mob until it had to be pointed out that the man was totally insane.
If we are to adopt the criterion of popularity as the only one we shall have some very mysterious figures indeed occupying both Front Benches. We might see Mr. Mick Jagger exercising authority as the Minister of Transport and Mr. Engelbert Humperdinck acting vigorously as the Foreign Secretary. We might, indeed, have to endure Mr. Tom Jones as Prime Minister.
If popularity is the only thing that matters, it is a very bad guide, because, as the hon. Gentleman said, very often unpopular decisions are the right ones. I wish to introduce in evidence the ex-

perience of his own right hon. Friend, who from time to time, by permission of Lord Salisbury, is permitted to lead the Opposition. There was a time, when the right hon. Gentleman the titular Leader of the Opposition was in office, when he introduced a Measure to abolish retail price maintenance. It was not popular in his own party. It was not popular in the country. But it happened to be the right thing to do at that time, as we have subsequently seen.
If it is validly argued that only popular measures are valid measures, that only popular Governments are legitimate Governments, we are faced with an entirely different proposition: the hon. Gentleman is arguing for no Government at all. This may be what is concealed within this innocuous Motion and in the Bill which the hon. Gentleman has in draft. I say deliberately from this side of the House that I am to some extent speaking from the cumulative experience and the traditions of the House itself—a rather unfamiliar posture for me. I accuse the hon. Gentleman not of interpreting the ideology of the six separate leaders of the Opposition in his Motion and in the projected Bill. There is no such ideology. There is nothing specifically Conservative, there is nothing specifically Liberal, there is nothing specifically democratic, in trying successfully to do by this Measure what Mr. Guy Fawkes signally failed to do by other measures in 1605.
I accuse the hon. Gentleman of presenting to the House not the ideology of Conservatism, not the ideology of tradition, not the ideology of the evolving organic society, but the ideology of Guy Fawkes; and as such I ask the House to reject the Motion.

Question put, pursuant to Standing Order No. 13 (Motions for leave to bring in Bills and nomination of Select Committees at commencement of Public Business), and negatived.

Orders of the Day — PRICES AND INCOMES BILL

As amended (in the Standing Committee), considered.

Mr. Speaker: I have had posted my provisional selection of Amendments up to Clause 8. I think that is as far as we might hope to go today.

4.10 p.m.

Mr. Michael Foot: On a point of order, Mr. Speaker. I wish to raise a matter relating our procedure today. I fully understand the situation as regards the selection of Amendments and the posting of the list in the Lobby for the convenience of Members, and I fully realise that an impossible situation would be created if the selection of Amendments were to be a matter of controversy on every occasion at the beginning of the Report stage of a Bill. But I wish to raise what I believe to be a special question of procedure arising on the present Bill.
Many of us, on looking at the selection of Amendments—I do not think that it is putting matters too moderately—were deeply shocked by the selection. Many of us on this side who find that none of our Amendments is selected feel that this is an outrage on the procedure of the House. We wish to seek a remedy. I am not asking you to pass judgment now on particular Amendments, Mr. Speaker, but I wish to suggest a procedure which could overcome the feelings of outrage which many of us on this side feel.
I have in mind, in particular, the failure of the Chair to select Amendments dealing with the penal Clauses in the Bill, the Clauses which many of us regard as the most offensive parts of it. As none of these Amendments, either from this side of the House or from that, dealing with the penal Clauses have been selected, I would suggest to you, Mr. Speaker, that you could reconsider the matter and make a fresh announcement to the House about your selection after we have dealt with the new Clauses.
The practice of placing in the No Lobby a statement of Amendments selected is not a governing factor; it does not create a situation in which the Chair is not able to change its selection. I would ask you

respectfully, Mr. Speaker, to take into account the very strong feelings on the matter on this side and one or two other points which I now add.
Many of my hon. Friends put down an Amendment to the Motion for a Second Reading which we hoped would be selected. One of the prominent parts of our Amendment referred to the penal Clauses of the Bill, and, if that Amendment had been selected, we should then have been able to speak and vote on that aspect of it. However, in your discretion, Mr. Speaker, that Amendment was not selected. In the circumstances, many of us hoped that we should have opportunity to debate and vote on the subject when it came up on Report.
It was right and proper that the matter should be debated from certain aspects in Standing Committee, but it is right also, we believe, that Amendments should be put down on Report. In 1966, when the earlier Measure same before the House dealing with prices and incomes, which incorporated penal Clauses for the first time, there was an opportunity provided on Report for Amendments dealing with certain aspects of the penal Clauses to be debated then, and many of us fully expected that that precedent would be followed, or partially followed, in the selection of Amendments on this occasion.
Therefore, Mr. Speaker, I ask that you undetake to make a fresh announcement to the House about the selection of Amendments after we have dealt with the new Clauses, taking into account especially, I hope, the arguments which I have put about the penal Clauses, Clauses which no hon. Member on either side will dispute are of great importance, extending for a longer period than ever proposed before in British history the application of provisions of this nature.
I would ask that you make such an announcement, Mr. Speaker. If you do not, as far as I can see the only remedy which we should then have—I should like your guidance about it—is the remedy which we would not wish to seek that is, to put down a Motion about the selection of Amendments. I ask you Sir, to consider the points I have put and to undertake to make a fresh announcement about selection after we have dealt with the new Clause.

4.15 p.m.

Sir Douglas Glover: Further to that point of order, Mr. Speaker. I support what has been said by the hon. Member for Ebbw Vale (Mr. Michael Foot). It seems to me that, in a great many of the debates which we have recently had, the hard core of opposition to the Government's proposals has been unfortunate in not being selected by the Chair. I accept that the Chair has a fantastically difficulty task, but when there is a sharp division of view in the House, as there is in this case, I feel that the hon. Member for Ebbw Vale makes a powerful request when he asks that the matter be looked at again, if the Chair could agree to do so. Otherwise, the views which a great number of hon. Members hold about the Bill cannot be debated, because the Clauses on which they could be debated are not selected by the Chair.
I do not wish to delay the House. I wish only to show that the views put forward by the hon. Gentleman are not held only on one side of the House.

Mr. Stanley Orme: Mr. Speaker, I do not doubt that you take full account of the serious view which we hold on the penal Clauses. Some of us wish to vote them out. Amendment No. 3, in the names of my hon. Friend the Member for Derbyshire, South-East (Mr. Park), several others of my hon. Friends and myself, and Amendment No. 6 in the name of right hon. and hon. Members opposite go to the centre of this controversy. In Standing Committee, the penal Clauses were debated for two whole sittings. When they were put to the vote, the Government survived the Division by only one vote.
Some of my hon. Friends and I feel that this is a matter of such consequence that we must ask you, in all sincerity and in no spirit of personal criticism, Mr. Speaker, knowing full well the difficult job which you have and the criticism which the Chair sometimes receives about its selection, to reconsider the matter on this occasion. We realise that, at the end of the day, you have to make the selection, but we would urge upon you, as my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) has done, that, if it be possible, you should consider the question again.
We regard the penal Clauses as the kernel of the Bill in relation to penal sanctions against trade unions. We feel that, in a democracy, the right to express an opinion on the matter and, if necessary, to vote should be allowed. I urge upon you, Sir, the representations which my hon. Friend has made.

Mr. Robert Carr: Mr. Speaker, we on this side appreciate the difficulty of your task in this matter. I wish only to comment on one point raised by the hon. Member for Ebbw Vale (Mr. Michael Foot) and his hon. Friend the Member for Salford, West (Mr. Orme). I refer to the penal Clauses. The introduction of criminal law into this field is a matter of very great importance. Although it has been debated in previous years and in Standing Committee on the Bill, it is so serious and central that, with great respect, I would ask you to give serious consideration to the need for further debate on that one point.

Mr. Ian Mikardo: Mr. Speaker, like the right hon. Gentleman the Member for Mitcham (Mr. R. Carr), I had the privilege of being a member of the Standing Committee, and I wish to make a respectful submission to you based on experience in the Committee.
I am well aware that the general principle which is applied by the Chair— obviously, it has a great basis of sub-Stance—is that matters which have been adequately ventilated in Standing Committee are not as a rule brought before the House on Report.
Looking through the Amendments which you have selected in your provisional list, I can see that broadly that is the criterion you have applied. I put it to you with great respect that it has not been universally applied. Some Amendments in the names of hon. Members opposite, but none in the names of my hon. Friends, have been selected although they were ventilated in Committee. I make no complaint about that. I am not asking for non-selection of the Amendments of hon. Gentlemen opposite. They are good Amendments and deserve to be considered.
The Bill is an extension in time of the 1966 and 1967 Acts, but it goes beyond them in a number of respects.


It would be wrong if only 35 hon. Members were able to consider the major extensions of those Acts. For the first time, the Bill includes penal provision and the introduction of the criminal law into industrial relations. For the first time, it includes workers covered by wages councils and agricultural wages councils, that is, the lowest-paid workers whom the policy is proposed to protect. The Bill operates more quickly and goes on longer, and the standstills are longer in the previous Acts.
As my hon. Friend the Member for Ebbw Vale said, some of my hon. Friends put down an Amendment on Second Reading in the hope that we might be able to ventilate and express with our votes our opposition to some of these features. That was prevented, doubtless for good reasons.
I am opposed to the whole Bill, but there are some of my hon. Friends who, while not opposed to the whole of it are opposed to one or two features. It will be a shame if they were put into the position in which the only way they could express their distaste for some features would be to vote against the Third Reading. There were only two hon. Members from this side of the House who were able to speak and vote that way in Committee, because there were only two who felt like that about the penal Clauses and the inclusion of the agricultural and wages council workers. They were my hon. Friend the Member for Darlington (Mr. Ted Fletcher) and I.
There are more than 300 hon. Ladies and Gentlemen on this side of the House, and although I think that I am pretty good I would not pretend to be a spokesman for all of them. It would be wrong if consideration of these vital new matters were limited to only two hon. Members on this side, and, for that matter, only 14 Conservative hon. Members and one Liberal hon. Member.
We are, so to speak, in a situation in which there is a difference of degree so great that it has become a difference in kind. Therefore, I add my voice to those on both sides of the House who have urged you, Mr. Speaker, to be kind enough to have another look at this during the next hour or two, whenever

you have the leisure so to do, and give us the benefit of your further consideration.

Sir Harmar Nicholls: I do not dissent from the points put, and hope that you will be able to give further consideration to the matter, Mr. Speaker. But I was pained to listen to the unparliamentary language in which the hon. Member for Ebbw Vale (Mr. Michael Foot) put his point to you. I do not believe that it should be allowed to stay on the record just because the words which I believe unparliamentary were submerged in a welter of other words. To suggest that the Chair was being outrageous, as he did; to suggest that the Chair acted improperly, as he did; to suggest that the Chair was unfair, as he did; is, I believe, well on the way to making this an assembly where we cannot talk rationally and sensibly on matters which should be properly discussed. While I in no way dissent from the point hon. Members have been trying to make, I believe that the Chair must protect itself from that sort of language when a point of order is put to it.

Mr. Trevor Park: We are accustomed to the eccentricities of the hon. Member for Peterborough (Sir Harmar Nicholls), and, therefore, I shall not take up any time in commenting on them. The House will know what worth to place on what he said.
I support the point my hon. Friends have made in asking you, Mr. Speaker, to reconsider the matter. The penal Clauses are central to the Bill's whole purpose. They are extremely controversial and extremely unpopular. In the opinion of many of us, their effects both economically and politically, could well be disastrous. It would be entirely wrong if the House were not afforded an opportunity of debating these Clauses on Report, and I hope that you will look at this point, in particular.
It is also true that my hon. Friends and I have a distinctive point of view on many other issues connected with the Bill. It was in order to give expression to it that we put down our Amendments. Not one of them have been selected. Therefore, we are in a position where that point of view will not be able to be adequately expressed.
You are aware, Sir, as I am, that outside the House, in recent years, there has been a great deal of criticism of its effectiveness. Both its dignity and its reputation have been called into question and increasingly large numbers of people have asked whether the House can any longer be regarded as giving an adequate expression of opinions held outside. It is important that no action of ours should be allowed to give further validity to that point of view. That is why I hope that you will feel able to accept the suggestion of my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot), and make an announcement when the new Clauses have been discussed.

Mr. John Biffen: May I associate myself with the point of order of the hon. Member for Ebbw Vale (Mr. Michael Foot). I assure you, Mr. Speaker, as I am sure was the sentiment of the hon. Gentleman and all who have spoken in his support, that this is in no sense in hostility to the Chair, because we appreciate the immense difficulties of reaching the kind of decisions associated with the choice of Amendments on Report.
I suggest, particularly in view of the immense importance attached on both sides of the House to the penal provisions, and of the present delicacy of relationships between the House and another place, that it might be singularly unfortunate if the only opportunity this House had to debate the penal provisions was in considering Lords Amendments. I hope that that might be among the points that might weigh with you in the reflection suggested by the hon. Member for Ebbw Vale.

4.30 p.m.

Mr. Speaker: Perhaps I might deal with all the points of order now.
I take no exception at all to the raising of these points of order, or anything said by the hon. Member for Ebbw Vale (Mr. Michael Foot) or any other hon. Member. If the hon. Member for Ebbw Vale were to think that Mr. Speaker was in any way unfair in his selection, and that he was actuated by anything other than proper procedural motives, it would be his duty to put a Motion on the Order Paper criticising Mr. Speaker.
The general issue is exceedingly difficult. The House sends a Bill to Com-

mittee, the Committee discusses the Bill, and when the Bill is before the House, in Committee, all kinds of Amendments are in order. The Report stage is quite a different stage from the Committee stage, and, while it would not be in order for the Chair to go seriatim through the Amendments which have not been selected, they have not been selected for the traditional parliamentary reasons which distinguish the consideration of Amendments on Report as compared with Amendments in Committee. I was interested to hear the hon. Member for Poplar (Mr. Mikardo), who seems to have found some Amendments that I have selected which I should not have selected because they are not new. I do not think that that is quite correct. I will of course take note of the representations which have been made to me.
The difficulty is that there are three strands of opinion in the House. I am quite aware of them. I have studied the Committee Report and each of the Amendments on the Notice Paper. I am aware of the disappointment which hon. Members always feel when their own Amendments are not selected, either in Committee upstairs or on Report. As the hon. Member for Poplar pointed out, there is a point when detail almost develops into degree, when quantity almost becomes quality. We had an example of that when we took on the Floor of the House, on consideration of the Criminal Justice Bill, a matter which had been debated at great length upstairs and which was yet selected for debate on Report.
I can give no immediate undertaking, but I take note of all the points raised, and if I add to my selection I will let the House know.

Mr. Michael Foot: I thank you for your statement, Mr. Speaker. I certainly meant no reflection on you. Indeed, I would have no right to make any reflection on your fairness. My reference to a sense of outrage was an accurate statement of the feelings of hon. Members when they saw that, if this procedure were followed, they would be denied the opportunity of speaking and voting on the Report stage on what they regarded as a most essential part of the Bill. If you are to make a further statement, I am most grateful.
May we take it that your statement will be roughly at about the time that


we finish consideration of the proposed new Clauses, so that hon. Members may have the opportunity of seeing what procedure is to be followed? We are particularly concerned about Amendments No. 3, No. 4 and No. 6, and the earlier you were able to make your further statement the more convenient it would be to us.

Mr. Speaker: I shall be back in the Chair, as is usual, at 6.15 p.m., and probably by that time I will have had the opportunity to consider the points which have been raised.
I took no offence at the use of the word "outrage". It was political outrage—the outrage of conscience of hon. Members who very much want to discuss at the Report stage what was discussed upstairs in Committee and find themselves unable procedurally to devise a way by which they can do it. They could have perhaps found ways of doing so. But I will look at the whole matter again.

New Clause 1

SUSPENSION OF ORDERS WHERE AFFECTED FIRMS REACH NEW PRODUCTIVITY BARGAINS

Where a firm employing workers directly affected under an order notifies the Minister that it has reached a new productivity bargain subsequent to the making of the order, then the Minister shall be required forthwith to suspend the order pending a review and report by the N.B.P.I, of the new wage structure involved. No renewal of the order may take place until the N.B.P.I. has reviewed and reported on the change.—[Mr. David Howell]

Brought up, and read the First time.

Mr. David Howell: I beg to move, That the Clause be read a Second time.
The purpose of the Clause is to ensure, perhaps in rather optimistic mood, what the Government mean when they talk of productivity in the context of the Bill. We had a brief and, to many of us, not satisfactory debate upstairs on the subject. Yet it is one on which the Government have said, if not done, a great deal. Indeed, the right hon. Lady the Minister has argued from the first that the Bill has a new economic parentage, that it is different, in ways which I hope will be specified, from the

past prices and incomes legislation, having built into it engines for ensuring higher productivity and earnings.
In an interview with The Sunday Times this week the right hon. Lady said that people in industry were saying that this was the lead they had been waiting for and that the talking had to stop and action taken. She commented:
I have been saying this for a long time: we've got to get down to the grass roots.
And she went on to talk about the services of the new Productivity Division of her Department, which, she said, would snowball.
We now seek to find out how all this will work. We want to ensure that, when there is all this talk about productivity bargains and criteria for use by the Prices and Incomes Board, sympathetic consideration may be further extended to a time and set of happenings after the application of an Order. In other words, we argue that, after an Order has been placed affecting particular firms or a single firm, there may well be a time when, as a result of new processes or new machinery on the shop floor, it will be necessary to reorganise the wage structure so as to relate it to productivity in new forms through different processes and in many cases to grant substantial wage increases.
We want to ensure that, if this situation comes—presumably the Government would like it to be brought about—and substantial wage increases are sought for particular workers during a period when an Order is in force, the structure can be reviewed and reported upon. If the Government accept the new Clause, it will show that not only are they serious about trying to encourage productivity bargains at the time they learn about wage increases, but are keeping a continuing watch to ensure that productivity bargains are not frustrated.
The other aspect is the question of how the new Productivity Division is to work. The right hon. Lady places her major emphasis on productivity in her argument for the Bill. In our brief debate on the matter in Committee, the question was raised of exactly how and when these able men appointed by the right hon. Lady were to get to the grass roots and what they were to do there. It transpired that the main way productivity is to be


tackled is through the labour side— through labour productivity and, therefore, through the reorganisation of manpower in particular firms, regardless of the structure and capital structure and management of those firms. I am sure that I am not misquoting the Under-Secretary of State.
The question was then raised as to which firms were to be helped, and we got no satisfactory answer. The question concerned whether the firms to be helped were those which already have productivity bargains, with high productivity and high wages, or whether this service would be applied to inefficient firms. If it was to be inefficient firms, was this not a rather bizarre misdirection of the right hon. Lady's energies?
The Joint Parliamentary Secretary argued, in return:
… those who are at present employed in efficient firms, because of their efficiency have limited scope for increased productivity, whereas those employed in inefficient firms, because of their inefficiency, have greater scope for increased productivity."—[OFFICIAL REPORT, Standing Committee F, 30th May 1968; c. 406.]
This would seem to present us with a world in which there are inefficient firms with low-grade or mediocre management, and that it is to these, where there is low productivity and inadequate thrust towards productivity bargains, that the whole attentions of the right hon. Lady's Department should be turned. This seems to be an extraordinary interpretation of the duties of the Government. Productivity is not just to do with the labour side, but is an amalgamation on outcome of the really intelligent and skilful combination of capital, equipment, labour, talent and management skill.
To move to a firm which is inefficient, with inefficient or mediocre management, and imagine that new ways of organising the labour side will produce efficiency, is to misunderstand what productivity is all about, or what is the outcome of the industrial processes which lead to higher output, with the same or lower resources, and, therefore, lower unit costs. It was this deep doubt among my hon. Friends about the Government's approach to productivity, underlined by the right hon. Lady's talking about going to the grass roots, that led us to put down this Clause.
We have always argued that productivity is not something that comes by issuing Girl Guide calls for more productivity all round. It does not come from going to the grass roots and concentrating on one side of industry. It flows from management thrust, from new ideas, innovation, from the application of new skills and talents on all sides. If the Clause were accepted, there would be a chance, where firms managed to mobilise enough incentive to strike productivity deals, that they would not be met with a blank refusal for the very substantial wage increases sometimes involved.
The famous Fawley agreement is supposed to be the father of these productivity deals. One of the senior executives involved in that deal is on record as saying that if the prices and incomes legislation had existed then, the deal would never have been struck. It is this kind of sentiment which must run through the minds of many managers and trade union leaders who are trying to get changes in wage structures, increases in earnings and a high rate of innovation in industry. Productivity comes from incentives to management, trade union reform of various kinds, but certainly not the kind proposed in the Bill, and as a result of a major and very different economic strategy from that which the right hon. Lady and her colleagues are pursuing.
Above all, we feel that the Bill is anti-innovation and will slow down the rate at which new techniques are introduced into industry. This will mean out-dated goods being sold instead of up-to-date goods which will help to bridge the export gap. The Clause seeks to ensure that in this case productivity will not be frustrated.

4.45 p.m.

Mr. John Peyton: I have not disagreed with a word that my hon. Friend the Member for Guildford (Mr. David Howell) has spoken in his able and thoughtful speech. My difficulty arises in examining the new Clause, which implies some sort of blessing to the Prices and Incomes Board. I should hesitate to give even implied approval to it. I can understand that the objection of the right hon. Lady to the Clause is that it would make the procedure unworkable. There would be nothing to


stop firms saying that they had made a new productivity arrangement and the Order would have to be suspended. The process could be continued ad infinitum.
This Bill is a beastly and brutal thing. It is unjust and unfair, and I do not think that it will work. Where I differ most sharply from the Government and the right hon. Lady, is in the assumption they make throughout this nasty legislation that the Government and the Prices and Incomes Board together can control and oversee in detail the vast complexity of industrial relations. My fear is that they will, by their constant intervention and meddling, vitiate industrial relations rather than improve them.
They are constantly tampering with details which they cannot possible understand. Their interference with promises made is something which we should not lightly countenance. While I agree with everything said by my hon. Friend, I do not regard the Clause with any enthusiasm, because it involves the constant intervention of some board or other, in this case Mr. Aubrey Jones and his doubt-growing team, in the detailed and intimate affairs of industry. I cannot believe that this is wise or proper.
I anticipate that the right hon. Lady will invite the House to reject the Clause, for reasons which seem to be deplorable. I want to make it clear that I have reservations as to its value, although I understand my hon. Friend's motives in moving it. This discussion proves what a vain exercise it is for the House of Commons to attempt to improve such legislation. The real trouble is that it is so bad and unpleasant, so vile, that it is beyond improvement. The best we can do is to hack it about and, if possible, destroy it altogether.

Mr. Peter Emery: May I congratulate my hon. Friend the Member for Yeovil (Mr. Peyton) for placing the right definition on the Bill. Everyone who served on the Standing Committee would agree that there was a general feeling of loathing for the Bill. Our difficulty has been to improve it in the face of the obstinacy that the Government have displayed in allowing any improvements to be made. It has been a case of "Barbara knows best and this is what the Bill is to be." Therefore, the new

Clause has some use. I see it as a test of the Government's seriousness and intent.
If the Government are interested in ensuring that increases in productivity are made, and if they wish to live up to the claims made in their speeches that they want to encourage the making of productivity bargains between trade unions, workers and industry, there can be no reason for rejecting the Clause. It attempts to ensure that when productivity bargains have been struck the Ministry cannot interfere and stop their being implemented, and any Order against pay rises which applied previously shall be ignored until a report has been made by the Prices and Incomes Board.
I understand the objection to extending the work of the Prices and Incomes Board. One of my condemnations of the Bill is that the Government, time and again, are pushing away executive decisions which should be made by Ministers and trying to get them carried forward in their name by a body which they suggest is impartial. This is a discreditable way of carrying on Government, and it should not be allowed.
I should like to consider for a moment the criteria of productivity, because they are essential in considering the Clause. In the relevant Statutory Instrument there are approximately eight lines of English which I fail to understand. I have attempted to interpret them in a more direct way by means of a proposed new Schedule, part of which appears on page 11292 of the Notice Paper. In paragraph 31 of the proposed Schedule, I provide that
If payments by result or similar incentive schemes are operating and these are able to allow a person to increase his earnings the Government will not interfere yet. However, the N.B.P.I, is being asked to see if some method of interference can be worked out to allow the Government to get into the Act.
It is expected that the forthcoming report of the Prices and Incomes Board will offer guidance on the application of incomes policies to systems of payment by result. This is exactly what I am trying to point out—that the question of productivity bargains is being shifted from the Government to the Board.

Sir Edward Brown: This question is exercising the minds of all of us. We heard a statement by the Minister of


Transport today bearing directly on this matter. He said that the present dispute would be settled merely by the unions going to the employers and accepting productivity terms for a 10½ per cent. increase.

Mr. Deputy Speaker (Sir Eric Fletcher): Order. I do not think that we can go into that matter on this Clause.

Mr. Emery: The relevance of my hon. Friend's intervention—and I shall not pursue it too far—is that it shows that here we have a Minister suggesting a form of agreement to which obviously objection would be taken, whatever the productivity bargain. It is typical of the Government that one Minister does not know what another Minister is doing, and different views are being expressed from the Government Front Bench.
I will not pursue the question of the criteria for productivity bargains; no doubt we shall refer to them in different guises on other Amendments. The Clause allows the Minister, for the first time, to make a clear and definite statement of her views about increased productivity. If she seriously argues that the Clause will detract from her powers, we must cast great doubt on her intent. It goes in a direction in which the Conservative Party would wish to go, namely, to encourage freely negotiated bargains between employers and employees to increase productivity.
This is the only way in which major steps forward will be taken. We shall not get anywhere with pleading or by making speeches in the House. What is needed is more money in the pockets of the workers for more work. When an agreement has been made to that effect between employers and employees, any order limiting wage increases should fall. That is the purpose of the Clause.

Mr. Raymond Gower: I share the view of my hon. Friend the Member for Yeovil (Mr. Peyton) about the quality of this legislation, which enshrines a code which is the antithesis of that operating in the most successful industrial countries. Nevertheless, he will agree probably that the Bill is all we have to work on and that some of us have to patch even the most imperfect garment.
I should have thought that the Secretary of State would be disposed to wel-

come the motive of the new Clause, if not its wording. Soon after her appointment, we all got the impression that she wished to see a breakthrough in productivity and productivity agreements. Whether that impression was created deliberately or inadvertently, I do not know. What can be the objection to the Clause, apart from the objection posed by my hon. Friend the Member for Yeovil? He said that the objection might be that bogus claims might be made concerning agreements of this kind. I cannot feel that that is a serious objection. Companies and firms which wished to benefit in this way surely would put forward genuine agreements.

Mr. Peyton: My hon. Friend must not misquote me. I did not say that they would be bogus. All that I suggested was that it would be easy to reduce the procedure to a total nonsense by repeatedly saying, "We have made an arrangement".

Mr. Gower: I should not have thought that matters would develop in that way. Safeguards could be made.
The objection of the right hon. Lady the Secretary of State might be that acceptance of the principle of the Clause would place people in firms which had achieved productivity agreements in too advantageous a position compared with those in other firms. I should have thought that that was a bad objection. We should instil in the minds of those who are not in such firms or factories a recognition or knowledge of the benefits which will or might ensue from the achievement, laboriously perhaps, of successful new agreements of this kind.
The Minister might come along with the objection that there are some processes and some kinds of industry where it is more difficult to achieve successful agreements of this kind. I accept and recognise this. But, again, I should not think it a valid objection to the acceptance of this principle, because it would be in the interests of those people, too. If we can achieve over a wide front the working out of many more successful agreements, surely it is not only likely to benefit a particular industry, but it is likely to benefit the whole economy and render shorter the period during which the Government would consider it necessary to sustain this kind of legislation.
The more dynamic we can make our economy, even in the mind of this Government, the shorter the period during which we should have to endure this kind of legislation. Therefore, I plead with the Minister to consider this new Clause carefully. Here is the possibilty of putting something good into a sombre background. I hope that the right hon. Lady will look at it with sympathy.

Mr. R. T. Paget: For the reasons given by the hon. Member for Yeovil (Mr. Peyton), I think that this is obviously a wrecking new Clause. It provides an opportunity for anybody who is subject to an Order from the Board preventing an increase in wages to cancel that Order and make another arrangement to increase wages. It is plainly a wrecking new Clause. I am not necessarily against it for that reason, because I believe that the Bill is a piece of obscurantist nonsense.
Taking it in this sense and construing the Clause as meaning what it says, that we will stop the Board from cancelling or limiting wage increases, I ask why it should not do that. What is the purpose of trying to prevent wage increases? If we do not give the money to our workers, what do we do with it? Somebody spends it. If somebody spends it, what is the advantage in making provisions preventing the workers benefiting from it? I do not see the sense of this matter.
This is an attempt by the Government to control things that they cannot control. We cannot control prices. We can push them out of shape by preventing an increase in one direction, but the purchasing power being given by that means merely creates an equal and balancing increase somewhere else to take up that purchasing power. Equally, I do not believe that we can effectively control wages. The things we can control, and which the Government will not control, are our import and export policies and the use of our currency as a general reserve for the convenience of other people.
These are the kind of Socialist controls which the Government could and should make, but will not. What we cannot do, and what all Governments from the days of Rome onwards have not been able to do, is to create an artificial system of prices and incomes at the same time as

we accept prices and incomes as our regulator. We cannot do that both ways, but that is what the Government seem to be attempting to do.

Mr. Geoffrey Lloyd: I support the new Clause. Far from being a wrecking Clause, it is a very constructive one which will help the House and the country to avoid the great danger in the Bill. The Bill, if it means anything, is an attempt to make wages lower than they would otherwise be. I hold that low wages are a recipe for national industrial stagnation. One of the most important functions of high wages is to force our manufacturers and producers in general into the use of the most up-to-date machinery.
I do not want to develop my argument at great length, but I should like to approach the matter from three points of view. First, my experience in Birmingham is that whenever there is a boom which is accompanied by high wages that is the time when manufacturers are forced by economic circumstances to instal the latest labour-saving machinery. By doing so, they enable themselves to survive in a competitive atmosphere and they are able to pay those high wages.
When we were discussing this matter recently, a well-known industrialist—I have not got his permission to reveal his name—wrote to me, saying:
One knows from one's own personal experience that again and again it is impossible to justify installation of the kind of automatic machinery commonly used in America because the labour-saving saving that it produces at our wage costs simply is not enough to pay for the machinery.
I remember putting the argument in another way many years ago when talking to the head of the General Electric Co. I was urging on him the need to instal more automatic machinery of the kind used in America. He said, "Certainly, but I cannot do it. I cannot justify it, because wages here are so much lower than in the United States".
Knowing the right hon. Lady's intellectual interest in these subjects, I must remind the House that the matter has been approached at a high academic level in a celebrated book on British and American technology in which it is argued—and I have never heard the case rebutted—that one of the reasons for the dramatic surge forward in American


production and industry in the 19th century, and the reason fundamentally why British world leadership in industry crossed the Atlantic in the last century, was the pressure exerted by high wages and scarce labour on the whole of the entrepreneurial classes in that country which urged them continually to develop more modern types of production.

5.15 p.m.

Mr. Paget: Another example is agriculture. The hon. Gentleman would be astonished at the improvement in the techniques of agriculture.

Mr. Lloyd: To sum up this part of my argument, this point was made in an interesting way by comparing the performance of various countries in an article in the Financial Times by Mr. Harold Wincott, on 7th September 1965, at an earlier stage of the discussion on an incomes policy. He summed it up in this way:
 The more you brood over these figures "—
that is, the figures for this country, Japan, the United States, West Germany and France—
the more you are forced to conclude that our economic doctors are making a faulty diagnosis. The symptoms of the English Disease, as it is now known the world over, are not excessive rises in incomes and prices. My charts show plainly enough that most other countries have these symptoms to an even more marked degree than we have. The real cause of the English Disease is poor productivity. If only the T.U.C … would learn the lesson … That lesson, is quite simply, that the three countries where hourly earnings have risen most—Japan, West Germany and France—are the three countries where output per man-hour has risen most.
It is for that reason that, as a matter of principle, I suggest we should support the Amendment. I know that the right hon. Lady's heart is in the right place, and that she wishes to see an increase in productivity and in wages, but she argues that at the moment she cannot afford that, and, therefore, she uses the blunt instrument of the Bill. Let us provide by the Amendment that the blunt instrument is suspended when a productivity agreement—and it must be a genuine one—can show that an increase in productivity will accompany a rise in wages. In that case, I maintain that it is for the national good that the operation of the Bill should be suspended.

Sir D. Glover: This is the first time that I have risen to address the House

on any part of the Bill. From what I have heard this afternoon, the hon. Member whose views most closely fit mine on the Bill is my hon. Friend the Member for Yeovil (Mr. Peyton). I think that this is a shocking Bill. I agree with the hon. and learned Member for Northampton (Mr. Paget), who said that it was a nonsense. It really is a modern Statute of Labourers, and it will have very much the same effect on our industrial growth and efficiency.
The Bill is trying to control the uncontrollable. It is trying to put a strait-jacket on something which ought to be free and fluid. It is trying to regulate and put into recognisable form something which is automatically changing day by day. It is putting the emphasis on the established success of today, and hindering the small and developing companies of the present which ought to become the leaders of the future. It is trying to establish the format of an industrial society in a way which will lead the country into far more trouble than it will cure. To me the Clause is like thinking one can help a child who has two paralysed legs by giving it a third artificial leg which is also paralysed, which will, in effect, only hinder its locomotion.
I should like to hear a good deal more "turkey" talked about what the House means by productivity. It is only too easy to use these catch-phrases. I should like to know what they mean. Every efficient firm ought to be increasing its productivity day by day. Hardly a day should go by without something happening in a large organisation to increase its productivity. It is not every firm which falls into the classic case of the refinery at Fawley which was almost a complete new conurbation of an industrial complex where, starting from scratch, a productivity deal was eventually hammered out after two or three years of negotiation and put into operation. They were dealing with a new complex. Most industrial firms are dealing with—

Mr. Geoffrey Lloyd: It was not a new complex. The refinery had been there for a long time. They were installing new machinery. It is true that the new machinery was on a large scale, but it was only an improvement on an existing


operation which had rendered great service to the country for many years.

Sir D. Glover: I accept what my right hon. Friend says, and I do not want to over-emphasise what I am saying. I am not saying that there will never be a productivity agreement. There will be many such agreements, but in the bulk of firms and industries there will not be a new dramatic productivity agreement. There will be what I call flowing productivity improvements going on all the time.
What the Clause is trying to do is to make firms arbitrarily notify the Board that they have produced a new productivity agreement, when in fact they have done something to try to meet orders. After a period of trial and error the agreement may turn out not to be a productivity agreement at all. In other words, it may not bring about increased productivity. The difficulty very often is that one does not know until afterwards whether what is to be done will increase productivity.
People can sit around a table and say, "If you forgo this we will do that, and if you do that we will do this" and everything is put down in writing, but whatever is agreed has to be translated into practice, not in the boardroom, but on the shop floor, in an enormous number of departments and processes, and it may be that when all the interlocking changes have been operating for six months they produce a disappointing result. It is only by putting into practice what has been done in theory that one can find out whether the advantages which were hoped for are gained.
I do not think that every productivity agreement will in practice turn out to produce all that the parties to the agreement hoped that it would. I do not mean that there will be no improvement if an agreement is reached which should bring about a 10 per cent. increase in wages following an agreement after a lot of negotiation between a firm and its workers, then after the scheme has been in operation for six or nine months it may be found that the forecasts were too optimistic, and that the figure should have been 5 per cent. instead of 10 per cent. There is no exact science in this, any more than there is in so much of industrial negotiation.
We are all working to improve the efficiency of the nation. Here, I agree strongly with my right hon. Friend the Member for Sutton Coldfield (Mr. Geoffrey Lloyd), because I have always been a strong supporter of a high-wage low-cost economy. I maintain that the best and most likely way to increase the productivity of the nation is to introduce innovations when it is financially desirable for that to happen. People will not put in a vast amount of new machinery if it is still cheaper to employ labour working old machinery.
One of the reasons against innovation and modernisation in the Lancashire textile industry was that it was cheaper to employ people to work the old looms because these had been written down until they stood in the books at nothing. If, because of high wages, it had been in the interests of firms to put in new machinery, the change would have been very much more rapid than it was.
The new Clause is an attempt to help the Government, as a result of our having lived with the Bill and become almost foster-mothers over many weeks, to make the unworkable work. I agree that it is the duty of an Opposition to try to make a Bill work. The new Clause is a marginal improvement which makes it more flexible and more likely to work. Therefore, if my right hon. Friend the Member for Mitcham (Mr. R. Carr) decides to divide on it—although I think that its value is marginal but because it gives greater flexibility—I shall vote with him.

Mr. John Nott: I was not on the Standing Committee and I am, therefore, glad to be able to speak for the first time on the Bill on a new Clause concerning productivity bargaining, one of the most vital aspects of the whole policy and one which has so far been woefully neglected by the Government since their first prices and incomes legislation in 1966.
Over the last two years, although much heat has been generated on this issue, there has been wide agreement between both sides of the House and among many hon. Members opposite who often appear to be locked in conflict, that a rise in wages should, as far as possible, be accompanied by a commensurate increase in production, that the economy needs to be run at a reasonable level of demand and that the Government's function is to educate the public to realise that persistent rises


in wages are self-defeating. There is, therefore, little disagreement among the parties on these fundamentals.
The shame is that, since the Government introduced their first legislation, their public relations and the marketing of their policy has been so inept. While they could have emphasised the productivity aspect of the policy, all the emphasis has been on the restraint of incomes. Although, lately, the right hon. Lady has been trying to correct this widespread impression, the view still persists that the restraint of incomes is their basic concern. This has happened to the extent that the wage earner believes that the Government have deliberately set out to keep from him wage increases which are his due. The Government have convinced the housewife that the Government can and should hold back prices, whereas everyone knows that that is simply impossible for any Government to do so. Likewise, the unions have become convinced that the Government have set out to destroy the basis of their creation and to disrupt the collective bargaining system.
This has happened because the Government have persistently refused to emphasise the opportunities for the increase and encouragement of productivity bargaining. If one sets out to restrain incomes, one automatically reaches a point, which the Government reached some time ago, when one must also, as a political quid pro quo, hold back prices. This is the most disastrous thing for any Government to do, because one then removes the only mechanism in the market for bringing demand into balance with supply. The cash flow of efficient firms is disrupted, investment falls back and one is in the vicious cycle of recrimination and frustration which now faces the Government.

Mr. Deputy Speaker: Order. I must remind the hon. Gentleman that this is not a Second Reading debate on prices and incomes. We are discussing a new Clause.

Mr. Nott: The way in which the Government can get out of this predicament is by showing that they accept at least the basic reasoning of the new Clause. If it were accepted, it would give firms an incentive to promote productivity bargaining. Then, slowly, the Government could bring the unions and the

people to understand that their policy was positive, not negative, and was aimed at encouraging productivity.
The aim of most productivity bargains is wholly good. My only criticism of the new Clause is similar to that of my hon. Friend the Member for Ormskiric (Sir D. Glover) that, in this form, it could easily be used as an excuse for the complete disruption of the Government's policy, and I cannot see them accepting it in this form. But if they can accept that more emphasis should be placed on encouraging productivity bargains and can show that they recognise that this is easily the most important aspect of their policy, it will have been worth debating.
Productivity bargains will not be encouraged in the type of atmosphere associated with a compulsory prices and incomes policy of the nature now before the House. In Report No. 36 of the Prices and Incomes Board, on Productivity Agreements, Mr. Aubrey Jones adopted the attitude that a prices and incomes policy creates the necessary atmosphere for the encouragement of such bargains. I believe this to be untrue and that productivity bargains, which everyone, on both sides, desires, can be encouraged and can succeed only in an atmosphere of the maximum flexibility and freedom in industry.
For that reason, although I see many obvious faults as, I expect, do my hon. Friends, in the wording of the new Clause, I support it because it emphasises the most important aspect of what should be the Government's policy. I hope that whoever sums up will concentrate on why productivity bargaining has not been given the emphasis which it might have been given throughout the past few years.

5.30 p.m.

Mr. Philip Holland: Two objections have been made to the new Clause. The first, made by those who object to the whole Bill and to the idea of statutory intervention in wage negotiations, is that because the Bill is bad, everything to do with it is bad, so that no possible proposal would improve it. I agree that it is a bad Bill, but there is always the possibility that, at the end of the day, it will become law because we will not be able to defeat the Government on Third Reading. Thus, hedging our


bets on that possibility, we should do all we can to give the Measure a few redeeming features.
On that basis alone it is worth considering any Amendments and new Clauses that are put forward. In the unhappy event that we will be stuck with the Bill and that it will become law, I urge my hon. Friends, who disagree with every line of it, and the hon. and learned Member for Northampton (Mr. Paget). to think again about this new Clause.
The second is a wrecking objection. The Clause states:
No renewal of the order may take place until the N.B.P.I. has reviewed and reported on the change.
If the Board has any ability at all, it should have the ability to stop obviously bogus claims. If it is incapable of doing that, it should not be in existence. But even if it does not have that ability and is a complete waste of time—and is an utter smokescreen which is incapable of acting efficiently—we should do what we can to ameliorate the position.
Even if the Clause would allow wages to go up and even if employers were faced with the prospect of effecting savings elsewhere—perhaps by investing more in new machinery, so increasing their capital investment, thereby increasing their productivity—it should be considered as an incentive. In this negative way it could act as an incentive to productivity. We can by this means, test the sincerity of the Government's desire to increase productivity and encourage productivity bargains.
The Clause would, therefore, do no more than to give an incentive to companies threatened by an order under the Bill to achieve a productivity bargain. On this basis alone it is worthy of support. The Government should accept it as an earnest of their goodwill and show that they are sincere in saying that they want productivity bargains.
My remarks do not imply that I support the principle of intervention in negotiations between employer and employee. In the event of our being stuck with the Bill, we must do all we can to give it some redeeming features. I hope, therefore, that if the Government do not accept it, hon. Members will press it to a Division.

The First Secretary of State and Secretary of State for Employment and Productivity (Mrs. Barbara Castle): The hon. Member for St. Ives (Mr. Nott) coolly lectured the Government on their failure to put over in the country at large the productivity aspects of their prices and incomes policy. Having done that, he left the Chamber, no doubt feeling that he had done a good day's work. In so far as it is true—and I accept that it is true to a considerable extent—that the people have got a false image of the Government's prices and incomes policy, a very large proportion of the responsibility for that must rest with hon. Gentlemen opposite.

Sir D. Glover: Rubbish.

Mrs. Castle: The whole tenor of the speeches of hon. Members opposite has been to repeat the theme which they are glad and delighted to see has caught on in some people's minds: that the policy is designed to hold wages down. They persist in repeating this on every public platform and they have repeated it today. They ignore, and insist on ignoring the fact that wages have risen more than prices in every year under a Labour Government and that real wages and earnings have been rising substantially.
Above all, hon. Gentleman opposite are desperately anxious to obscure the fact that in this Measure, and in the White Paper, the considerations of which the Bill is putting into force, there is offered to the people a better opportunity of increasing their real earnings by increasing productivity than was ever given by a Government in our post-war history.
The new Clause was disposed of so effectively by the hon. Member for Yeovil (Mr. Peyton) and my hon. and learned Friend the Member for Northampton (Mr. Paget) that there is no need for me to argue the case against it at length. Of course, it is a wrecking proposal, since it does not make any sense in terms of the purpose of the Bill. Hon. Gentlemen opposite may say that they do not want the Bill, and they are free to oppose it in appropriate ways. But it is not convincing for them to produce a Clause like this and try to argue that it will somehow strengthen the whole battle for higher productivity.
I prefer the honesty of the hon. Member for Yeovil when he says, "I loathe


the Bill and everything the Government are doing. We must, therefore, hack it about and, if possible, destroy it." The Clause is a bit of hacking about which would definitely have the result of destroying the emphasis which we are putting behind the importance of productivity, and that is why I ask the House to reject it.
It does not even specify what Orders it wants covered. One assumes that it deals with standstill Orders which are put on pay increases. Under the Government's criteria and the policy of the White Paper, a standstill will have been put on a pay settlement or claim because it neither satisfies the criterion of helping the lower paid nor fits in with the other criteria, particularly that which specifies that the cost of the increase must be offset by some realistic productivity quid pro quo, the reason why a claim or agreement would be standstilled.
The new Clause says, in effect, "What about the position in which employers and unions recognise the justice of the Government's original standstill?" That is a nice oblique tribute to the whole policy. "While recognising that the standstill was justified, because the agreement was not really a productivity bargain"— the more hon. Gentlemen opposite talk about the Bill the more they give us our whole case— "we will do what the Government want and work out a genuine productivity deal." In that situation, says the new Clause, the existing Order shall be revoked immediately, pending a review of the new productivity deal by the Board and its report on it.
The new Clause is supposed somehow to encourage firms to get down to discussing productivity, which the standstill Order said they should do in the first place. To talk as some hon. Members have done about their concern to see greater productivity and then to suggest that I should be compelled to revoke the standstill Order, whatever "phoney" productivity deal might be put to me, is surely double talk of the worst kind. It is obvious that the one thing my Department wants—this was the reason for the standstill Order in the first place—is for management and workers to work out genuine productivity deals.
I assure the House that we should lose no time in accepting such a deal. We

want to encourage and attract workers to get away from the old concept of across-the-board inflationary and unjustified action and to get down to discussing real productivity in which my Department is their ally. This is the whole purpose of the new Productivity and Manpower Division that we are setting up. It is to be the ally of workers and management in the attempt to raise wages where those wage increases can be afforded because they have been earned. If anyone had any doubt about that it must have been dispelled by the remarks made by the new head of the division, Mr. George Cattell. He came from working for Rootes with a very fine record of productivity encouragement behind him, a very fine record in the techniques of the more efficient utilisation of manpower.
That is an aspect of productivity with which my Department is concerned. Mr. Cattell is on record as saying that the British worker should get higher wages. This is the theme. Can hon. Members opposite be so grossly irresponsible as to say at this moment in the country's history that the only way is to give an absolutely all-clear to wage increases regardless of whether they are related to higher production and productivity will follow? That has not been the result in recent years. Because we are working on such narrow margins, and have been since the war, we have to make all wage increases and productivity agreements parallel; not just sit back and hope that production will follow.
That this can be done, and is done through the influence of my Department, is shown in case after case which is reported and discussed day after day. I draw the attention of the House to a very recent example reported in last Sunday's Sunday Times. It was the article by its labour correspondent, Mr. Stephen Fay, which was headed:
Power Gas and the D.E.P. forge a copper-bottomed deal.
The article described how imperative this was to advance the completion date for the refinery being built for Power Gas for Continental Oil, at Immingham, and how the firm negotiated an incentive deal.
When we looked at it we could not call it a productivity deal, because there was no productivity built into it. The firm was desperate; it wanted to get its


completion date reached and it took an easy way out which gave no guarantee. When the agreement came to us we said frankly, "It will not do." We said, "We are sorry. We will have to refer this to the Prices and Incomes Board, unless you sit down with us and see if we can forge a genuine productivity agreement." With the help of my Parliamentary Secretary and my officials we related the bonus to targets for completion.
5.45 p.m.
This is absolutely basic, life-saving common sense. At the end of the discussion we were glad to approve the deal. The article ends by saying:
After long negotiations with the unions, a new agreement was officially accepted. By last week the labour force had responded and work on the site was going faster than ever before. The agreement has no guarantee of success of course, but it is copper-bottomed enough to satisfy the D.E.P. and it appears to satisfy the workers and it is important because it illustrates a pattern which will become more and more common in the industry in the next 18 months, one of benevolent intervention by the D.E.P.
I make no apology to the House for that policy. On the contrary, I believe it is one of the most vital elements in our whole prices and incomes policy. That is the approach and spirit which permeates the whole Bill and the powers we ask for in this Bill. It is a spirit of positive help to both sides of industry. It is the basis on which alone we can afford the wage increases that the workers of this country have a right to expect. Because the new Clause—and its movers know it—would take away the power of my Department to continue to examine agreements as they come up until it is clear that the productivity quid pro quo fits in with the policy, it would fatally undermine a very important part of the policy, the positive and creative part and —I say without any hesitation—the patriotic part.
Therefore, I ask the House to reject the Clause. Hon. Members opposite know that if they were in power tomorrow they would have to face this problem and realise that the country has to become more productive. This is the only way we can get the higher standard of life to which our Government are dedicated.

Mr. R. Carr: I hope that the right hon. Lady has not begun as she means to go on in these debates. She must learn that "guff", or rhetorical oratory, is no substitute for a properly argued reply. I shall have to remind her, as I had often to say in Committee, that somehow or other machinery, including parliamentary machinery, is inclined to work better when it is given oil rather than acid. To try to reply to a new Clause, non-controversial in purpose even if the Government decided that it was not practicable in its workability, and well-intentioned in purpose, merely by abusing the Opposition—both our motives and our common sense—is not the way in which the Bill should be considered. Nor is it the way in which the people would wish it to be considered.
Apparently the right hon. Lady has not even troubled to understand the reason why we put forward the Clause. Instead, she accused us of responsibility for the false image which exists in the country of the whole purpose of the Government's prices and incomes policy.
The right hon. Lady said that it is our fault that the prices and incomes policy is understood throughout the country as being a policy to hold wages down. We could, although I do not suppose you would let us, Mr. Deputy Speaker, have a debate on whether that is not the purpose of the policy. It is difficult to understand what it is if it is not that. Whatever the purpose may be, I cannot believe that the right hon. Lady's hon. Friends, or the trade union leaders and their members outside the House, take their cue from what we say. They are men and women of experience and common sense. They see the effect of the policy, and they judge on that, not what we in the Opposition say, although I have little doubt that they may happen to agree with what we say.
Having accused us of responsibility for giving the whole policy a false image, the right hon. Lady then accused us of "phoney" double-talking and of being grossly irresponsible, all, apparently, because we have moved the Clause and are fortunate in having it selected for debate.
Having heard the speech of my right hon. Friend the Member for Sutton Coldfield (Mr. Geoffrey Lloyd), who


speaks with great experience of industry, and as an ex-Minister, and of other hon. Members of the House, I find it difficult to understand why the right hon. Lady, instead of treating this as a serious subject and as an attempt to raise an important matter, should accuse us of being guilty of "phoney" double-talk, or of being grossly irresponsible. I can only hope that she has not begun as she means to go on.
Unlike the right hon. Lady, I will address myself to the purpose of the Clause and try to make clear what I should have thought would have been obvious. This policy is always referred to as a prices and incomes policy; indeed, the Bill is, unfortunately, called a Prices; and Incomes Bill. As we have made clear in previous years, we wish that it could be called a Productivity, Prices and Incomes Bill. The policy of the Government is not just a prices and incomes policy, it is really a productivity, prices and incomes policy. We must remember this in a practical form, and try to give expression to it in the Bill.
My hon. Friend the Member for St. Ives (Mr. Nott) expressed doubt whether a prices and incomes policy helped productivity bargaining. He did more than express a doubt; he expressed an opinion that it would hold it back. My hon. Friend the Member for Guildford (Mr. David Howell), in moving the Clause, referred to the Fawley agreement which, he said, is regarded as the father of all productivity agreements. He quoted the opinion of one of those who negotiated the agreement that, if prices and incomes legislation had existed at the time it would have been impossible to have negotiated the Fawley agreement.
I cannot help wondering, as we sit here today, what about the railways? Has the existence of prices and incomes legislation helped to expedite, or may it not rather have helped to slow up, the progress of productivity bargaining on the railways, the slowness of which is the reason why the public is, to put it mildly, suffering the inconvenience it is suffering today and will apparently suffer for some days further?
This legislation, in the view of nearly every practical person inside or outside the House, is perverse and damaging. Since it is so perverse and damaging, it

is natural to ask whether it is any good trying to improve it. My hon. Friend the Member for Yeovil (Mr. Peyton) thought that perhaps it was not. So, perhaps less severely but almost to the same extent, did my hon. Friend the Member for Ormskirk (Sir D. Glover). The hon. and learned Member for Northampton (Mr. Paget), from the Government side, has said that this was obscurantist legislation because it sought to control things that no Government could control. Nevertheless, at this stage of the debate, we have to contemplate, as my hon. Friend the Member for Carlton (Mr. Holland) said, the possibility that we may have to live under this legislation, however much we dislike it.
Therefore, I suggest to the House that we are right to try to improve it, even if only slightly, and even although we must seize any and every opportunity to defeat it. We shall certainly seize the opportunity to try to defeat the Bill when it comes to Third Reading, but for the moment we have to work on the supposition that we may, alas, be unsuccessful in defeating the Bill and will have to live under it, and we must, therefore, try to improve it.
If we are to improve it—and this is the purpose of the Clause—we must put productivity right in the front line. It is no good putting it into the front line merely in speeches, or even in administrative action, if we are to have legislative powers governing this policy. We do not believe that we should, but if there are to be legislative powers then productivity should also appear in the front line of the legislative powers; and at the moment it is not even in the back line, let alone in the front line of the Bill. If we must have a Bill of this kind we want to see the importance of productivity recognised in words in a Clause in the Bill.
If the legislation is not to be entirely repressive and feeble it ought to be given every chance to act as a lever to bring about progress We believe that the provisions for punishment provided by the legislation should at least have a strong reformatory purpose and content, and that is the purpose of the new Clause. The position envisaged in the Clause is of a group of workers, whether in a company or in a sector of industry involving a number of companies, who have been


made subject to a standstill order for up to 12 months, because, it is said, the settlement on which they had agreed with their employers did not match the criteria; either it was not a productivity deal at all or, to use the right hon. Lady's words, it was a phoney productivity deal.
So, within the philosophy of the Bill, it would have been right to impose a freeze Order upon them. What are we to do? Are we to allow the freeze Order to run for a whole year, or are we to give the employers and workers a chance, if I may put it crudely, to reform themselves? They have agreed on something, they have tried to get away with something, which is now not to be acceptable, and a standstill Order is clamped on to them. Having had that Order clamped on them, they repent of their ways, have new negotiations and reach a new agreement, which may be a genuine productivity agreement which it would be in the interests not only of themselves but of the country to implement. Are they, as the Bill at present says, to be prevented from doing something for 12 months merely because sentence has been imposed upon them, or are they to be given a chance to say that they have thought again and have come forward with a new productivity agreement which will give them the chance to have it judged and implemented without them having to work through the hard labour of the 12 months' punishment?

Mr. Leslie Spriggs: The right hon. Gentleman will have heard some of his hon. Friends call the new Clause a wrecking Clause. Does this not make all he said this afternoon a lot of double-talk?

Mr. Carr: I am trying to explain the purpose of the Clause because I feel that the Government has not understood it. I hope that what I am saying will convince one or two of my hon. Friends who may have had some doubt, and also the Government, who are really the people who matter. I can assure the hon. Gentleman that there is a good purpose behind the Clause, that it is not irresponsible in its purpose, that it is not "phoney" double-talk and that it ought to be seriously considered, and has not yet been seriously considered by the Minister.
The purpose of the Clause is to give a chance to people who are subjected to a 12-month standstill, because they have agreed on a deal which does not meet the criteria, to come forward with a new deal. If the proposal contained in the new deal is a genuine productivity bargain, it would be in the interests of the country as well as those concerned, that it should be implemented quickly rather than be delayed for 12 months.

6.0 p.m.

Mrs. Castle: Does the hon. Gentleman not understand that a standstill Order is related to a particular agreement? If the original agreement is torn up, and a new one is reached, then the Order ceases to be effective. If it were desired to put an Order on a new agreement, because it was "phoney", then a new Order would be necessary.

Mr. Carr: This is very interesting news. What we are trying to write into the Bill is not that the Minister should have discretion to do these things, but that it should be written into the Bill in order to put productivity into the front line. We want to bring about the situation whereby, when workers who have had their wage settlement with their employer frozen, who come forward with a new agreement, then the Minister shall revoke the previous Order. We want this to be recognised in the Bill, so that the punishment contained in the original Order may have the chance to have a reformatory effect.
I realise that in certain circumstances this power could become a wrecking power, and it might be wise to suggest that the powers contained in the Clause should contain a provision to permit this to be done only once. It would be an incentive to people who had made an agreement which did not conform with the criteria, to come forward with an alternative agreement, so that they may have their previous sentence repealed. That is the purpose of the new Clause, and if we have misunderstood the Bill, if the right hon. Lady says that the power is already in the Bill, and we have not understood it, then this might not have been the case, if she had treated us seriously, instead of abusively. On the reply we have had so far I can only advise my right hon. and hon. Friends to vote for the Clause.

Question put, That the Clause be read a Second time:—

Division No. 238.]
AYES
16 5 p.m.


Alison, Micheal (Barkston Ash)
Glover, Sir Douglas
Montegomery, Fergus


Allson, James (Hemel Hempstead)
Glyn, Sir Richard
More, Jasper


Astor, John
Godber, Rt. Hn. J. B.
Morrison, Charles (Devizes)


Atkins, Humphery (M't'n &amp; M'd'n)
Goodhart, Philip
Mott-Radcluffe, Sir Charles


Awdry, Daniel
Goodhew, victor
Munro-Lucas-Tooth, Sir Hugh


Baker, Kenneth (Acton)
Gower, Raymond
Murton, Oscar


Baker, W. H. K. (Banff)
Grant, Anthony
Nabarro, Sir Gerald


Baniel, Lord

Neave, Airey


Barber, Rt. Hn. Anthony
Grant-Ferris, R.
Nichols, Sir Harmar


Batsford, Brian
Griffiths, Eldon (Bury St. Edmunds)
Noble, Rt. Hn. Michael


Beamish, Col. Sir Tufton
Grimond, Rt. Hn. J.
Nott, John


Bell, Ronald
Gurden, Harold
Onslow Cranley


Bennett, Sir Frederic (Torquay)
Hall, John (Wycombe)
Orr, Cant L P s


Bennett, Dr. Reginald (Gos. &amp; Fhm)
Hall-Davis, A. G. F.
Osborn, John (Hallam)


Berry, Hn. Anthony
Hamilton, Lord (Fermanagh)
Page, Graham (Crosby)


Biffen, John
Hamilton, Michael (Salisbury)
Page, John (Harrow W.)


Biggs-Davion, John
Harris, Frederic (Croydon, N.W.)
Pardoe, John


Birch, Sir Nigel
Harrison, Brian (Maldon)
Pearson, Sir Frank (Clitheroe)


Black, Sir Cyril
Harrison, Col. Sir Harwood (Eye)
Peel, John


Blaker, Peter
Hastings, Stephen
Percival, Ian


Boardman, Tom (Leicester, S.W.)
 Hay, John
Peyton, John


Body, Richard
Heald, Rt. Hn. Sir Lionel
Pike, Miss Mervyn


Bossom, Sir Clive
Heath, Rt. Hn. Edward
Pink, R. Bonner


Boyle, Rt. Hn. Sir Edward
Heseltine, Michael
Pounder, Rafton


Braine, Bernard
Higgins, Terence L.
Powell, Rt. Hn. J. Enoch


Brewis, John
Hiley, Joseph
Price, David (Eastleigh)


Brinton, Sir Tatton
Hill, J. E. B.
Prior, J.M.L.


Brown, Sir Edward (Bath)
Hirst, Geoffrey
pym, Francis


Bruce-Cardyne, J.
Hogg, Rt. Hn. Quintin
Quennell, Miss J. M.


Bryan, Paul
Holland, Philip
Ramsden, Rt Hn James


Buck, Antony (Colchester)
Hordern, Peter
Rawlinson, Rt. Hn. Sir peter


Bullus, Sir Eric
Hornby, Richard
Rees-Davies w. R.


Burden, F. A.
Howell, David (Guildford)
Renton, Rt. Hn. Sir David


Campbell, H. (Oldham, W.)
Hunt, John
Rhys williams, Sir David


Campbell, Cordon (Moray &amp; Nairn)
Hutchison, Michael Clark
Ridley, Hn. Nicholas


Carr, Rt. Hrr. Robert
Iremonger, T. L.
Ridsdale Julian


Cary, Sir Robert
Irvine, Bryant Godman (Rye)
Robson Brown Sir William


Channon, H. P. G.
Jenkin, Patrick (Woodford)
Rodgers, Sir John (Sevenoaks)


Chichester-Clark, R.
Jennings, J. C. (Burton)
Rossi Hugh (Hornsey)


Clark, Henry
Johnson Smith, G. (E. Grinstead)
Royle, Anthony


Clegg, Walter
Jones, Arthur (Northants, S.)
Russell, Sir Ronald


Cooke, Robert
Jopling, Michael
St John-Stevas, Norman


Cooper-Key, Sir Neill
Joseph, Rt. Hn. Sir Keith
Sandys, Rt. Hn. D.


Cordle, John
Kaberry, Sir Donald
Scott, Nicholas


Corfield, F. V.
Kerby, Capt. Henry
Scott-Hopkings, James


COstain, A. P.
Kershaw, Anthony
Sharples, Richard


Craddock, Sir Beresford (Spelthorne)
Kimball, Marcus



Crosthwaite-Eyre, Sir Oliver
King, Evelyn (Dorset, S.)
Shaw Michael (Sc'b'gh &amp; Whitby)


Crouch, David
Kirk, Peter
Silvester, Frederick


Crowder, F. P.
Knight, Mrs. Jill
Smith, Dudley (W'wick &amp; L-mington)


Cimningham, Sir Knox
Lancaster, Col. C. G.
Smith, John (London &amp; W'minster)


Currie, G. B. H.
Lane, David
Speed, Keith


Dalkeith, Earl of
Langford-Holt, Sir John
Stainton, Keith


Dance, James
Legge-Bourke, Sir Harry
Steel, David (Roxburgh)


d'Avigdor-Goldsmid, Sir Henry
Lloyd,Rt.Hn.Geoffrey(Sut'nC'dfield)
Stodart, Anthony


Dean, Paul (Somerset, N.)
LIoyd, Ian (P'tsm'th, Langstone)
Stoddart-Scott, Col. Sir M. (Rlpon)


Deedes, Rt. Hn. W. F. (Ashford)
LIoyd, Rt. Hn. Sehwyn (Wirral)
Summer, Sir Spencer


Digby, Simon Wingfield
Longden, Gilbert
Tapsell, Peter


Dodds-Parker Douglas
Loveys, W. H.
Taylor, Sir Charles (Eastbourne)


Donnelly, Desmond
Lubbock, Eric
Taylor, Edward M. (G'gow, Cathcart)


Doughty, Charles
McAdden, sir Stephen
Teeling, Sir William


Douglas-Home, Rt. Hn. Sir Alec
MacArthur, Ian
Temple, John M.


Drayson G. B.
Mackenzie, Alasdair(Ross &amp; Crom'ty)
Tilney, John


du Cann, Rt. Hn. Edward
Maclean, Sir Fitsroy
Turton, Rt. Hn. R. H.


Eden Sir John
Macleod, Rt. Hn. Iain
van Straubenzee, W. R.


Elliot, Capt. Walter (Carshalton)
McMaster, Stanley
Vaughan-Morgan, Rt. Hn. Sir John


Elliott,R.W.(N'c'tle-upon-Tyne,N.)
Macmillan, Maurice (Farnham)
Wainwright, Richard (Colne Valley)


Emery, Peter
Maddan, Martin
Walker, Peter (Worcester)


Errington, Sir Eric
Marten, Neil
Walker-Smith, Rt. Hn. Sir Derek


Farr, John
Maude, Angus
Wall, Patrick


Fisher Nigel
Maudling, Rt. Hn. Reginald
Walters, Dennis


Fletcher-Cooke, Charles
Mawbay, Ray
Ward, Dame Irene


Fortescue, Tim
Maxwell-Hyslop, R. J.
Weatherill, Bernard


Fostor, Sir John
Matdon, Lt.-Cmdr, S. L. C.
Webster, David



Mills, Peter (Torrington)
Wells, John (Maidstone)


Fraser,Rt.Hn.Hugh(Sffford &amp; Stone)
Mills, Stratton (Belfast, N.)
Whitelaw, Rt. Hn. William


Galbraith, Hn. T. G.
Miscamphell, Norman
William, Donald (Dudley)


Gilmour, lan (Norfolk, C )
Michell, David (Basingstoke)
Wills, Sir Gerald (Bridgewater)


Gilmour, Sir John (Fife, E)
Monro, Hector
Wilson, Geoffery (Turto)

The House divided: Ayes 241 Noes 284.

Winstanley, Dr. M. P.
Worsley, Marcus
TELLERS FOR THE AYES:


Wolrige-Gordon, Patrick
Wylie, N. R.
Mr. Reginald Eyre and


Woodnutt, Mark
Younger, Hn. George
Mr. Timothy Kitson.




NOES


Abse, Leo
Fitch, Alan (Wigan)
Mabon, Dr. J. Dickson


Albu, Austen
Foley, Maurice
McBride, Neil


Alldritt, Walter
Ford, Ben
McCann, John


Allen, Scholefield
Forrester, John
MacColl, James


Anderson, Donald
Fowler, Gerry
MacDermot, Niall


Archer, Peter
Fraser, John (Norwood)
Macdonald, A. H.


Bacon, Rt. Hn. Alice
Freeson, Reginald
McGuire, Michael


Bagier, Gordon A. T.
Galpern, Sir Myer
McKay, Mrs. Margaret


Barnes, Michael
Gardner, Tony
Mackenzie, Gregor (Rutherglen)


Barnett, Joel
Garrett, W. E.
Mackie, John


Baxter, William
Ginsburg, David
Mackintosh, John P.


Bence, Cyril
Gordon Walker, Rt. Hn. P. C.
Maclennan, Robert


Benn, Rt. Hn. Anthony Wedgwood
Gourlay, Harry
McMillan, Tom (Glasgow, C.)


Bennett, James (G'gow, Bridgeton)
Gray, Dr. Hugh (Yarmouth)
McNamara, J. Kevin


Binns, John
Greenwood, Rt. Hn. Anthony
MacPherson, Malcoim


Bishop, E. S.
Grey, Charles (Durham)
Mallalieu, J. P. W. (Huddersfield, E.)


Blackburn, F.
Griffiths, David (Rother Valley)
Manuel, Archie


Blenkinsop, Arthur
Griffiths, Eddie
Marks, Kenneth


Boardman, H. (Leigh)
Griffiths, Rt. Hn. James (Llanelly)
Marquand, David


Boston, Terence
Gunter, Rt. Hn. R. J.
Mansh, Rt. Hn. Richard


Bottomley, Rt. Hn. Arthur
Hamilton, James (Bothwell)
Mason, Rt. Hn. Roy


Boyden, James
Hamling, William
Mayhew, Christopher


Braddock, Mrs. E. M.
Hannan, William
Meilish, Rt. Hn. Robert


Bradley, Tom
Harper, Joseph
Milian, Bruce


Bray, Dr. Jeremy
Harrison, Walter (Wakefield)
Milier, Dr. M. S.


Brooks, Edwin
Hart, Rt. Hn. Judith
Milne, Edward (Blyth)


Brown, Rt. Hn. George (Belper)
Haseldine, Norman
Mitchell, R. C. (S'th'pton, Test)


Brown, Hugh D. (G'gow, Provan)
Hattersley, Roy
Molloy, William


Brown, Bob(N'c'tle-upon-Tyne,W.)
Hazell, Bert
Moonman, Eric


Brown, R. W. (Shoreditch &amp; F'bury)
Healey, Rt. Hn. Denis
Morgan, Elystan (Cardiganshire)


Buchan, Norman
Heffer, Eric S.
Morris, Alfred (Wythenshawe)


Buchanan, Richard (G'gow, Sp'burn)
Henig, Stanley
Morris, Charles R. (Openshaw)


Butler, Herbert (Hackney, C.)
Herbison, Rt. Hn. Margaret
Morris, John (Aberavon)


Callaghan, Rt. Hn. James
Hilton, W. S.
Moyle, Roland


Cant, R. B.
Houghton, Rt. Hn. Douglas
Mulley, Rt. Hn. Frederick


Carmichael, Neil
Howarth, Harry (Wellingborough)
Murray, Albert


Carter-Jones, Lewis
Howarth, Robert (Bolton, E.)
Neal, Harold


Castle, Rt. Hn. Barbara
Howell, Denis (Small Heath)
Noel-Baker, Frances (Swindon)


Chapman, Donald
Howie, W.
Noel-Baker,Rt.Hn.Philip(Derby,S.)


Coe, Denis
Hoy, James
Oakes, Gordon


Coleman, Donald
Huckficld, Leslie
Ogden, Eric


Concannon, J. D.
Hughes, Rt. Hn. Cledwyn (Anglesey)
O'Malley, Brian


Conlan, Bernard
Hughes, Hector (Aberdeen, N.)
Dram, Albert E.


Corbet, Mrs. Freda
Hunter, Adam
Oswald, Thomas


Craddock, George (Bradford, S.)
Hynd, John
Owen, Dr. David (Plymouth, S'tn)


Crawshaw, Richard
Irvine, Sir Arthur (Edge Hill)
Palmer, Arthur


Cronln, John
Jackson, Colin (B'h'se &amp; Spenb'gh)
Parker, John (Dagenham)


Crosland, Rt. Hn. Anthony
Janner, Sir Barnett
Parkin, Ben (Paddington, N.)


Crossman, Rt. Hn. Richard
Jay, Rt. Hn. Douglas
Parkyn, Brian (Bedford)


Cullen, Mrs. Alice
Jeger, George (Goole)
Pavitt, Laurence


Dalyell, Tam
Jeger, Mrs. Lena (H'b'n&amp;St.P'cras,S.)
Pearson, Arthur (Pontypridd)


Darling, Rt. Hn. George
Jenkins, Rt. Hn. Roy (Stechford)
Peart, Rt. Hn. Fred


Davidson, Arthur (Accrington)
Johnson, Carol (Lewisham, S.)
Pentland, Norman


Davies, Ednyfed Hudson (Conway)
Johnson, James (K'ston-on-Hull W.)
Perry, Ernest G. (Battersea, S.)


Davies, G. Elfed (Rhondda, E.)
Jones, Dan (Burnley)
Prentice, Rt. Hn. R. E.


Davies, Dr. Ernest (Stretford)
Jones, Rt. Hn. Sir Elwyn (W.Ham,S.)
Price, Christopher (Perry Barr)


Davies, Ifor (Gower)
Jones, J. Idwal (Wrexham)
Price, Thomas (Westhoughton)


de Freitas, Rt. Hn. Sir Geoffrey
Jones, T. Alec (Rhondda, West)
Price, William (Rugby)


Delargv, Hugh
Judd, Frank
Probert, Arthur


Dell, Edmund
Kelley, Richard
Randall, Harry


Dempsey, James
Kenyon, Clifford
Rankin, John


Dewar, Donald
Kerr, Dr. David (W'worth, Central)
Rees, Merlyn


Dobson, Ray
Lawson, George
Reynolds, Rt. Hn. G. W.


Doig, Peter
Leadbitter, Ted
Rhodes, Geoffrey


Dunn, James A.
Ledger, Ron
Richard, Ivor


Dunnett, Jack
Lee, Rt. Hn. Frederick (Newton)
Roberts, Albert (Normanton)


Dunwoody, Mrs. Gwyneth (Exeter)
Lee, Rt. Hn. Jennie (Cannock)
Roberts, Rt. Hn. Goronwy


Dunwoody, Dr. John (F'th &amp; C'b'e)
Lee, John (Reading)
Roberts, Gwilym (Bedfordshire, S.)


Eadie, Alex
Lestor, Miss Joan
Robertson, John (Paisley)


Edwards, Robert (Bilston)
Lever, Harold (Cheetham)
Robinson, Rt. Hn. Kenneth (St.P'c'as)


Edwards, William (Merioneth)
Lever, L. M. (Ardwick)
Robinson, W. O. J. (Walth'stow, E.)


Ellis, John
Lews, Arthur (W. Ham, N.)
Rodgers, William (Stockton)


English, Michael
Lewis, Ron (Carlisle)
Roebuck, Roy


Ennals, David
Lomas, Kenneth
Rogers, George (Kensington, N.)


Ensor, David
Loughlin, Charles
Rose, Paul


Evans, Albert (Islington, S.W.)
Luard, Evan
Ross, Rt. Hn. William


Faulds, Andrew
Lyon, Alexander W. (York)
Rowlands, E. (Cardiff, N.)


Fernyhough, E.
Lyons, Edward (Bradford, E.)
Shaw, Arnold (Ilford, S.)

Sheldon, Robert
Taverne, Dick
Wilkins, w. A.


Shore, Rt. Hn. Peter (Stepney)
Thomas, Rt. Hn. George
Willey, Rt. Hn. Frederick


Short, Rt. Hn. Edward (N'c'tle-u-Tyne)
Thornton, Ernest
Williams, Alan (Swansea, W.)


Short, Mrs, Renée (W'hampton, N. E.)
Tinn, James
Williams, Alan Lee (Hornchurch)


Silkin, Rt. Hn. John (Deptford)
Tuck, Raphael
Williams, Clifford (Abertillery)


Silkin, Hn. S. C. (Dulwich)
Urwin, T. W.
Williams, Mrs. Shirley (Hitchin)


Silverman, Julius
Varley, Eric C.
Williams, W. T. (Warrlngton)


Skeffington, Arthur
Wainwright, Edwin (Dearne Valley)
Willis, Rt. Hn. George


Slater, Joseph
Walclen, Brian (All Saints)
Wilson, William (Coventry, S.)


Small, William
Walker, Harold (Doncaster)
Winnick, David


Snow, Julian
Wallace, George
Woodburn, Rt. Hn. A.


Spriggs, Leslie
Watkins, David (Consett)
Woof, Robert


Steele, Thomas (Dunbartonshire, W.)
Watkins, Tudor (Brecon &amp; Radnor)
Wyatt, Woodrow


Stonehouse, Rt. Hn. John
Weitzman, David
Vates, Victor


Strauss, Rt. Hn. G. R.
Wellbeloved, James



Summerskill, Hn. Dr. Shirley
Wells, William (Walsall, N.)
TELLERS FOR THE NOES:


Swingler, Stephen
Whitaker, Ben
Mr. Ernest Armstrong and


Symonds, J. B.
White, Mrs. Eirene
 Mr. Ioan L. Evans.

Mr. Speaker: I have a brief statement to make. I undertook to give consideration to requests made by a number of hon. Members that I might have another look at the provisional selection of amendment for consideration on today's Report stage. As I said earlier, I was aware of the issues which hon. Members raised with sincerity and feeling.
Perhaps I might again emphasise the tremendous difference there is between the Committee stage and the Report stage as far as selection of Amendments is concerned. As the hon. Member for Poplar (Mr. Mikardo) remarked, it is most unusual for an Amendment which has been debated at length and defeated in Committee to be again selected for the Report stage. The principles of selection are different, just as the rules of debate are different. There are various shades of thought in the House about the Report stage. Some hon. Members have thought it unnecessary. Others have thought that too many amendments are being selected at this stage; and others—as today— have felt that too few have been selected.
The difficulty today is that most of those Amendments non-selected were rejected because they had been debated at length, and negatived, in Committee. Hon. Members seeking to put down Amendments on the Report stage can always count on the advice of the Public Bill Office if they will seek it. What seems clear to me is that it would be impossible to relax the principles governing selection on Report in such a way as to make Report a second Committee stage. I have, however, given very careful and serious thought to the points made earlier in the afternoon and I have decided to add to today's provisional list something from the special point of view of a group of hon. Members on the Gov-

ernment side who otherwise, as was pointed out, have no Amendments of theirs selected today.
I have, therefore, decided to add the following Amendment to my list of those provisionally selected: Amendment No. 3; and also, Amendment No. 67 to be taken separately instead of being discussed on Amendment No. 56 which has already been selected. Amendment No. 118 will now be discussed with Amendment No. 61 and not with Amendment No. 56, as originally listed.

Mr. Michael Foot: May I thank you very much, Mr. Speaker.

Mr. Park: May I add my thanks to you, Mr. Speaker, and ask you whether you could give us guidance as to the point at which Amendment No. 3 will be taken?

Mr. Speaker: In its right place on the Order Paper. We simply follow the Paper chronologically and geographically. We come now to new Clause 4. Mr. Graham Page.

New Clause 4

APPEAL PROCEDURE

Where following a reference to the National Board for Prices and Incomes an order is made under any of the provisions of the Prices and Incomes Act 1966, the Prices and Incomes Act 1967 or this Act to require reduction of prices or charges, to defer wages regulation orders or agricultural wages orders, a petition may be presented to either House against the order within twenty-one days from the day on which the order was laid.

The petition shall be referred to the Chairman of Ways and Means or the Chairman of Committees and may either—


(a) pray for particular amendments to be made to the order, or
(b) object generally to the order.



Within seven days of the presentation of the petition the Minister concerned may deposit a memorial on the matter contained in the petition and the petition shall be referred to a Special Committee who shall have the same powers as given under a Special Procedure Order. If after consideration the committee are of the opinion that the order ought not to have been made or should be altered they shall report to the House within twenty-eight days of the presentation of the petition.—[Mr. Graham Page.]

Brought up, and read the First time.

Mr. Graham Page: I beg to move, That the Clause be read a Second time.
May I digress for a moment before launching on this Amendment to thank you, Mr. Speaker, from this side of the House for your consideration of the further Amendments.
This new Clause is headed "Appeal procedure". I am not sure that that is quite the right title but it is a nice, succinct one. It deals with the Parliamentary procedure on the exercise of the Ministerial power to make Orders under this Act, and indeed under the two previous Prices and Incomes Acts. When I say that it deals with Parliamentary procedure, that means that it deals with the rights of right hon. and hon. Members, especially with their rights to represent the views of their constituents and, on occasion, to protect their constituents against the Executive.
A characteristic of many of the Orders under the Prices and Incomes Acts of 1966 and 1967 has been that they affect particular interests. They are not so frequently Orders affecting everyone in the country, but they deal with particular interests, employees or firms making certain charges.
In new Clause 4 and in offering a proposal for dealing with this type of Order, we have in mind those which deal with separate interests. Under the previous Acts, the House will remember that we have had such narrow Orders as that dealing with the employees of Rockware Glass, that dealing with the pottery employees of Joseph Bourne & Son Limited and that dealing with laundering and cleaning charges, all of them narrow Orders dealing with particular interests.
For a matter of 500 years it has been a principle of legislation in this House that, when we are dealing with a Bill —and I recognise that we are dealing

with Orders in this Amendment, but the principle is similar—if it is a Bill
which affects a particular private interest in a manner different from the private interest of other persons or bodies of the same category or class."—[OFFICIAL REPORT, 10th December, 1962; Vol. 669, c. 45.]
it should be treated as a Private Bill. Those are the words of Mr. Speaker Hylton-Foster.
What is meant by treating a piece of legislation as a Private Bill and applying the Private Bill procedure to it is that the individual who may be affected by the Bill has the right to have his case heard by Parliament through the Private Bills Committee, and it is necessary to go through all the procedure for Private Bills so that one ensures that anyone affected to a greater degree in his private interests than others has the right to petition Parliament and have his case heard. Standing Orders go so far as to prevent the House from proceeding with a Public Bill if it includes some infringement of private interests and is what we term a Hybrid Bill.
We have no exactly similar procedure for the greater number of Ministerial Orders which are approved by the House from time to time. In a Statute, normally we give the Minister the power to make an Order by Statutory Instrument and, if that Order affects private interests to a greater extent than it affects the general public, there is no right for the individual to petition the House which he would have if it were included in a Private Bill. In another place, there is a special procedure for referring private interests in an Order to a special Committee to consider the effect of the Order. We have no such procedure here except by an Act giving a Minister power to make Orders.
When Ministerial Orders are likely to affect private interests, the parent Statute in many cases had said that the Minister must make his Order by a special Parliamentary procedure which is laid down by the Statutory Orders (Special Procedure) Act, 1945, as amended by the Act of 1965. Under that procedure, no Order is made until certain publication of it has been made and the service of notices on those affected, until objections have been considered and possibly until a public inquiry has been held. When the Order is made and laid before Parliament,


those affected may petition Parliament within 21 days, and their petition will be heard by a Joint Committee of both Houses.
With that form of procedure, we recognise what Parliament has recognised for 500 years in relation to Private Bills; that is, the right of the individual who is affected by legislation to petition Parliament so that his case is heard. That is the sort of procedure which we on this side of the House think ought to be applied to Orders under the Prices and Incomes Act.
Up to the present time, the special Parliamentary procedure has been used mainly in connection with encroachments on property rights, certain compulsory purchase orders, and the acquisition of minerals, coast protection, and so on. However, in Orders with which we are concerned under the prices and incomes legislation, how much more are private interests concerned, as we have seen in the Orders in the past, when it is not merely a matter of encroachment on property rights, but of encroachment on the rights to produce and to earn?
In paragraph 30 of its Sixth Report, the Select Committee on Procedure recommended to the House in the following words:
The attention of Your Committee was drawn to a discrepancy in the procedures of the two Houses in the treatment of Statutory Instruments that specially affect private rights and interests. The House of Commons has no procedure for considering petitions from affected parties against such hybrid instruments, and Your Committee recommend that a Joint Committee should be proposed to consider whether a procedure similar to that for Special Procedure Orders might be applied to these Instruments.
That is exactly what we suggest in new Clause 4. We suggest it by saying that the parent Statute can do exactly what the Select Committee recommended to the House and provide a form of procedure whereby there will not only be an inquiry before the Order is made, but a chance for the person affected by the Order to petition the House and make his case known.
The procedure does not delay the effect of the Order. If this Bill is to operate effectively, I appreciate that the Minister may have to make an Order quickly which will be effective at once. This form of procedure does not prevent that. The Order can come into force and effect

at once. The procedure merely provides an opportunity for the individual to make his plea to Parliament that the Order be annulled or amended. That plea will provide the House with the facts and arguments upon which it can eventually decide whether the Order should stand or be annulled.
It must be true that Orders under the Prices and Incomes Act are, in an unprecedented way, affecting individual interests rather than the public in general. That is the whole point of the Orders which are made under the Act. They are to stop a certain firm, group of individuals or number of employees or employers from breaching the principles laid down in the legislation.
It may be that this form of legislation cannot operate without Orders which affect particular private interests. If that be so, I ask the Government generously to recognise it. They will lose nothing by that recognition; they will cause no delay in the exercise of their power to make Orders. Here is an opportunity to adopt the recommendation of the Select Committee on Procedure, without damage to the principles of the Bill but with recognition of natural justice and the rights of the individual which the procedure of Parliament has always sought to preserve.

6.30 p.m.

Mr. Emery: Certain aspects of an appeal procedure or the possibility of appeal against Orders made by the Government were briefly discussed in Committee, and we have drafted this new Clause in an attempt to overcome the arguments which the Government then advanced. We accept that, under the Bill as it stands, an individual may make an approach to Ministers, but tthis is nothing like good enough. In Committee, the Under-Secretary of State said,
What safeguards are needed are there".
That was his view, but the only safeguard is that the aggrieved person may put in a written representation to the Minister, the very Minister who has agreed that the Order should be made. It was suggested that inspectors should be appointed, and the Under-Secretary's response to that was to say,
…hon. Members would not like the inspectors any more than they like the N.B.P.I."—[OFFICIAL REPORT, Standing Committee F, 30th May, 1968; c. 440.]


I did not accept that argument at the time, but one can see at least some fairness in it. Therefore, to overcome that objection, we have attempted to provide a procedure by which the appeal is made to the House and can be considered by the House. From that point of view, it makes sense.
I emphasise that the proposed appeal procedure would not stop an Order coming in or allow the House to refuse it. However, if a Committee of the House reported against it, there would be strong moral persuasion, I imagine, and the Government would probably think it right to take action themselves. But control is left with the Government. I should like the new procedure to be more forceful, but I recognise that there would be no chance of the Government accepting it in that form. With the idea of persuading the Government to accept the principle of what we propose, we have put down the new Clause in this form, still leaving power in the Government's hands.
The new Clause applies only to the new matters introduced in the present Bill, not to those dealt with in the previous Acts. I should be happier if the appeal procedure could be applied to everything, including the matters dealt with in previous Acts, but the new Clause refers specifically to Orders requiring a reduction of prices or charges, or deferring wages regulation orders or agricultural wages orders. Although we make the general point that we should like it to apply to everything, the new Clause is specifically limited to those three matters which are new in the present Bill.

Mr. Paget: Is it the conception that the petitioner should be represented by counsel before the Committee and that he should call evidence?

Mr. Emery: Yes, that is the view. We want the procedure to follow as closely as possible the present Special Procedure Order procedure.
We believe a right of appeal to be essential because, for the first time, the Bill will give punitive powers to the Government. An Order to reduce prices, made purely on a recommendation of the Prices and Incomes Board, could affect a company's profitability and its ability

to stay in business. Arguments put before the Board might be misunderstood. If a recommendation were made by the Board in such circumstances and an Order to reduce prices followed, the company could go out of business. Yet there is no appeal which the individual can make save that he may write a letter to the Minister. The Minister does not even have to give a statement of his reasons for rejecting the written representations. As this Order-making power could be punitive, and as the Government would be over-riding a decision, for instance, of the Agricultural Wages Board which had gone into the matter in the fullest possible way, the individual must have a right of appeal.
The criteria on which the Prices and Incomes Board give a verdict and then make a recommendation for a reduction in prices can be altered by the Government by Statutory Instrument. The Government are able to alter the law by which someone may be ordered to reduce his prices. They have only to change the criteria or introduce new ones by Statutory Instrument subject to 90 minutes' debate in the House. To take a reductio ad absurdum argument for a moment, it would be possible for the Government to decide that anyone who had had a price increase in the last five years should automatically be allowed no further price increases. The Minister shakes his head, but that is possible.
If a decision of that kind were made by the Government in exercise of punitive powers against the individual in any other sphere, there would automatically be a right of appeal, not just an appeal by letter to the very Minister who had made the Order. There is good sense in ensuring that the laws of natural justice should apply so as to allow the individual to come to Parliament and put his case.
There could well be a weakness in the wording of the Amendment. We are not the most expert draftsmen, and nobody will want to press it if the Government will accept the general principle behind it. If they will accept that we do not believe that an appeal merely in the form of a letter to the Minister is enough, and will make any alterations they feel necessary in the Amendment and introduce it in another place, I should welcome that.
The Prices and Incomes Board cannot be controlled by anybody, once the criterion has been set. Therefore, if it recommends a price reduction and the Government follow the recommendation through with an Order, it as fair and proper that people should have some right of appeal. That is entirely, and only, what the new Clause sets out to do.

Mr. Paget: The suggestion in the new Clause is misconceived. It is an attempt to impose a judicial decision on what is in effect an executive decision. I do not say that that does not sometimes happen, but it is wrong in principle when it occurs, and it is nearly always a piece of whitewashing.
The Prices and Incomes Board is not a judicial body. It must take an executive decision. It must decided whether an increase is justified from an economic point of view, and that is a value judgment. To have a Committee of the House to sit judicially upon that executive decision would not work. One would be trying to impose a worse judgment on a better one, and with no real basis for arriving at that judgment.

Mr. Emery: The whole of the hon. and learned Gentleman's argument falls to the ground, as this procedure is already used in planning. An appeal can be made to such a House of Commons Committee under the Special Procedure Order on certain planning matters.

Mr. Paget: And does it work? That is a singularly bad example, which one should not take any further. I cannot think of any instance where that procedure has had a beneficial result. I think that I shall have the hon. Member for Crosby (Mr. Graham Page) on my side in saying that. It has never worked, and it is not a particularly happy example to take here.
I do not know to what extent the new Clause has been thought out. The petitioner could apparently be heard before the Committee, and that means that he must be heard through counsel and must call evidence. Who is the respondent? Is it the Prices and Incomes Board? Is the Board to appoint counsel? Is it to call evidence? Will there be a judicial procedure in which on the one side there is the appellant petitioner and on

the other side the defendant? How else would it be worked? If it is not the Board which will be the respondent, how will there be a trial? This is a half-baked and ill-thought-out proposal.

6.45 p.m.

Mr. Emery: The hon. and learned Gentleman is using some strong arguments, which are partly misplaced. I do not wish it to become a judicial body, and I am not suggesting that. We make it quite clear that it is an administrative tribunal dealing with an executive decision.

Mr. Speaker: Order. We are on Report. The hon. Member must make a brief intervention, not a speech.

Mr. Emery: I wish it to be a brief intervention, Mr. Speaker. We suggest that if anybody is to be the respondent it is the Minister. Under the Clause, he or she shall deposit the memorial which the Committee shall consider, so it is not the Board.

Mr. Paget: But if on the one hand one has the petitioner represented by counsel and calling evidence, is one to have on the other merely a written representation, which is not by the Board—the people who made the Order one is opposing— but by the Minister? If so, how does the appellant cross-examine the witnesses called? How does he present his case? Is a written memorandum deposited either before or after his case has been presented a sufficient answer? That is what I mean by saying it is a half-baked Clause.

Sir D. Glover: It is not usual for me to quarrel with the hon. and learned Member for Northampton (Mr. Paget), but I think that his was one of those speeches in which one puts up an Aunt Sally deliberately to knock it down. I agree that perhaps the special procedure is not the most ideal way of dealing with those people who feel that they have not had justice. All that is sought in the new Clause is that virtually the same procedure shall apply for cases referred to the Prices and Incomes Board as has applied in planning cases. The hon. and learned Gentleman is entitled to say that the present arrangements about appeal to the House in planning are not good. I think that I should agree, but at least the procedure is the best we have; it may be


inadequate, but it is the only thing we have.
I congratulate my hon. Friends on the new Clause. If they could start from scratch and produce an entirely new system they would probably like to suggest it. But they probably very rightly decided that on Report that would not have much chance of being accepted by the Government, but that the Government might conceivably accept something parallel to an existing procedure. The Government could with reason say that they would accept the Clause because it would do no harm. It would introduce an appeal procedure, and they could accept that some form of appeal procedure is necessary.
One of the things that worries me is the increasing power of one gentleman who used to be a Member on this side of the House, Mr. Aubrey Jones, the head of the Prices and Incomes Board. Bill after Bill, and document after document give the Board more and more power. As far as I can see, he and his staff are working without any control from Parliament or anybody else. Whatever rulings they give appear to have the writ more than of law, of Holy Writ. They are beyond argument or discussion.
It is only sensible and right, when the Board will make a great many decisions under that Bill, that the House should produce procedure for appeals. As my hon. Friend the Member for Honiton (Mr. Emery) said, a firm might be put out of business. Are we really going to say that Mr. Aubrey Jones and his Committee— because that is what I will call his Board —can issue an instruction that will put a firm out of business and that that firm will have nowhere to make an appeal, apart from writing to the Minister, who may not even grant it the courtesy of a reply? Is this new organisation—it was created only three years ago—to grow and grow and become more and more powerful untrammelled by any appeal machinery whereby people can get things put right? Is the House to have no way by which a person can petition it for redress of wrong?
If the Government do not wish to see increased the atmosphere which is already present of their being a dictatorial Government, they will say that they

accept what the Opposition are trying to do and agree on the necessity for some machinery of this sort. Behind your very distinguished Chair, Mr. Speaker, there is the Petition bag. We have that because any member of the public has the right to petition this House for the redress of wrong. But we are building up outside organisations which have more direct power than many Government Departments, with the general body of the people having no appeal against their decisions.
Whether or not what is suggested in the new Clause is the most ideal way of dealing with the matter, I am not prepared to argue, but I do argue forcefully that the Government have a case to answer, and I hope that they will answer it by saying that they accept what the new Clause is trying to achieve, that there is reason for disturbance and that they will see that this part of our fears will be taken care of.

Mr. Biffen: I support the arguments of my hon. Friend, particularly to underline the apprehensions expressed by my hon. Friend the Member for Ormskirk (Sir D. Glover) about the activities of the National Board for Prices and Incomes and the necessity to give to the subjects or the firms affected by its reports some kind of redress. We do not live in an ideal world. This is not an ideal new Clause. But this is not an ideal Bill. When dealing with a piece of legislation of such general sloppiness as this, one is driven into a whole series of second-best considerations and palliatives.
The most one hopes for from this legislation is that it will not degenerate too much beyond being nonsense. One fears that it may degenerate into being arbitrary and tyrannical, picking out small groups of people. But that is what our experience of this kind of legislation tells us is what usually occurs. The commanding heights of the economy can be impaled by the activities of 15 engineering draughtsmen of Beckman Instruments. Their case was heard in an Adjournment debate. I am sure that Mr. Clive Jenkins would be anxious to use procedures which would be available under the new Clause to challenge some of the interpretations, arguments and inferences of the Prices and Incomes Board.
If ever one wanted the case for the new Clause, it was at least hinted at by the extraordinary proposition that perhaps the individual salary of Mr. Hambros is about to be investigated. I find this almost too absurd to consider but that is what this legislation means. It means the picking out of individuals.

Mr. Speaker: Order. We are not discussing the whole Bill. We are discussing new Clause No. 4, which advocates a right of petition against a decision of the National Board for Prices and Incomes.

Mr. Biffen: It is because of the narrowness and intensity of the effect of the Board's recommendations that there should be a right of appeal. Without wishing to stray further into the generality of the subject, which would incur your wrath, Mr. Speaker, I underline the argument of my hon. Friend the Member for Ormskirk about the necessity for some kind of appeal against the judgments of the Board. If ever there was, as it were, an over-mighty feudal baron it is Mr. Aubrey Jones. I quote from a highly respectable source of comment to sustain that argument. Commenting on the Board's Report No. 60, the Royal College of Nursing and the National Council of Nurses of the United Kingdom said:
The Royal College of Nursing Council regrets that the National Board for Prices and Incomes involved itself in matters outside the sphere of prices and incomes.
It is not the first time that kind of comment has been made, and when people's commercial livelihoods are endangered by the consequences of recommendations of the Board, accepted and enforced by the Government, the least this House can ask for is the maximum opportunity for legal appeal.

The Under-Secretary of State for Employment and Productivity (Mr. Roy Hattersley): Before I turn to the attractive arguments put by the hon. Member for Crosby (Mr. Graham Page), I want to deal with the more general arguments advanced. A word has been used, perhaps in error, which should not be allowed to go unnoticed. The hon. Member for Honiton (Mr. Emery) talked about the Government exercising "punitive" powers under the Bill. He knows very well that punitive powers are powers exercised for the intention of punishment. He also knows that nothing could be further

from our minds. Whatever else these powers are, punitive they are not.

Mr. Emery: If the hon. Gentleman does not consider that it is punitive to make a firm or company reduce its prices, he does not understand how industry and business consider this matter. They think that this is a punitive factor.

Mr. Hattersley: No doubt they will be encouraged to do so if the hon. Gentleman goes on repeating it, but if he thinks for a moment about the proposition he will realise that, whatever else is in the Government's mind, the idea of punishment is far from it. Our objectives, irrespective of disagreement about whether or not we are likely to achieve them, should surely be agreed as having nothing whatever to do with punishment.

Mr. Biffen: Is the hon. Gentleman seriously suggesting that the sudden interest in the salary of Mr. Hambro is not punishment for his having said rough things about the Government?

Mr. Hattersley: I say that entirely. I remind the hon. Member for Oswestry (Mr. Biffen) that, for a year, he has been asking us about what attitude we are likely to take towards individual salary increases. Since he has spent so much time urging us to be consistent about them as well as about group increase's, he should be the last to complain about what my right hon. Friend announced yesterday.
7.0 p.m.
The second argument deals with the powers of the Prices and Incomes Board, from which hon. Members opposite conclude that it is especially necessary that some sort of appeal machinery should be set up. The hon. Member for Ormskirk (Sir D. Glover) described the National Board as a board that can be controlled by nobody. The hon. Member for Oswestry drew attention to those occasions when it has been claimed that the Board went outside its terms of reference. As I understand the intention of the new Clause, it is not to prevent the Board from making comments which might be controversial, embarrassing or just plain wrong. It is to prevent Orders from being made which have a positive and definite effect.
It is therefore essential to understand that what we are considering is the procedures that have to be followed before an Order is made. Whether that Order is the result of a report which contains other items which the hon. Gentleman, or perhaps the House as a whole, regards as controversial, extraneous or wrong, is irrelevant. We are interested in the Orders, and in the Orders alone. We are certainly interested, as the hon. Member for Honiton said, in their application to individuals and the possible detrimental effects they might have on individuals.
There are, I suppose, two possible hypotheses as to how Orders might affect an individual company. The individual company needs the right of appeal, so the hon. Member for Crosby said, lest it be put out of business by the decisions of the Board. The first hypothesis is where an Order is made which affects a specific company and where it is known when the report is written that the company is near the margin of profitability and that a reduction in price might result in its bankruptcy. It is inconceivable that this will happen, but I will come to that later.
I suspect that the hon. Member for Honiton fears that a more likely case of bankruptcy, and therefore a more appropriate case for appeal through this machinery, is where an Order is made reducing prices throughout an entire sector, in which there may be individual companies imperilled by that general Order because they are nearer the margin than other companies.
If that is what the hon. Gentleman is saying, I am sure that he will concede that there are many occasions when Parliament takes a general industrial decision which affects disastrously people at the margin of profitability. I will take what I believe to be the hon. Gentleman's favourite Bill—the Resale Prices Bill, 1964. That Bill put out of business many retailers at the margin of profitability. I take an example which is particularly potent, because it is the converse of the case the hon. Gentleman quoted. I take the case when an agricultural wages Order is made, not under the regulations written into the Bill, which I hope will become law, but under the regulations now operating. This is an Order which is in no way susceptible to Parliamentary process. It is not made

by my right hon. Friend. It is made by the Agricultural Wages Board. We hope that we shall be granted powers to postpone the effect of such Orders, if that seems to be appropriate.
When such an Order is made insisting that farmers throughout the land pay a new level of minimum wage, I am sure that many farmers complain that, as a result of the Order, which has been the subject of no scrutiny whatsoever, they are likely to be put out of business. It is of the nature of general industrial decisions facing large sectors of the economy that those at the margin may well be affected in this adverse way.

Sir D. Glover: Surely in farming cases it is an agreement right across the board. Here we may be dealing with one firm.

Mr. Hattersley: I said that there were two arguments. One concerned the industry and one concerned individual companies. I said that I accept the hon. Gentleman's point that the arguments are different in those two respects. I hope in a few moments to turn to the arguments in so far as they relate to individual companies.
Having said that and having, I suspect, at least hinted that I am not altogether enamoured of the Clause, perhaps I should say why I describe it initially as attractive and attractively proposed by the Opposition Front Bench. I say this because I hope that the House will accept that the Government are sensitive to our obligation to preserve the civil liberty aspects of the prices and incomes policy and certainly anxious that there should not be the sort of breach, the sort of hardship, and the sort of difficulties, which hon. Members opposite have feared might be the case.
I ask my hon. Friends to reject the Clause, because I believe that the civil liberty aspects to which the hon. Gentleman referred are in no small degree already covered. I turn again to the duties and powers of the National Board and to our obligation towards them. It cannot be said too often that, except in two very special cases to which I shall refer, when the National Board makes a recommendation—let us say that a price should be reduced or that a standstill on wages should be prolonged—then that recommendation can be given effect to


and enforced only if it is supported by an Order made by the Government. That Order is subject to all the negative procedures of the House.
The final responsibility must be with my right hon. Friend. Her responsibility must involve hon. Members opposite, and occasionally some of my hon. Friends, drawing her attention to what they believe to be the shortcomings of her decision, exposing her to whatever criticism and ridicule they think are necessary and appropriate. There is this very potent and, qua Parliament, fundamental safeguard that the Ministerial decision to make an Order, which must supersede a report by the National Board, is subject to those potential embarrassments, potential difficulties, and potential limitations that the negative Order procedure puts on my right hon. Friend.
I will remind the House briefly of what those procedures are and how they relate to the Bill. The hon. Member for Honiton said specifically that the Clause was intended to cover only the new powers we are given in the Bill. I rather assumed from the hon. Member for Crosby that he intended the Clause to cover all orders and that that is why the Clause mentions the Acts of 1966 and 1967.

Mr. Graham Page: By reference to Clause 4, whose rubric is
Power to require reduction of prices or charges
we refer back to the previous Acts.

Mr. Hattersley: Having had at least one of my suppositions confirmed by the hon. Gentleman, I will remind the House of the procedures which must operate if an Order prolonging a standstill is to be made in that way. If the Government wish to operate a standstill, and if they wish to prolong it as a result of their investigations, they first must do so as a result of a published report by the N.B.P.I. This, in itself, puts the Government right in the line of public opinion. They are operating on criteria which are published, reported and known. Not only that, but that report is subject to limitations. It must be a report written within the terms of the Government's current policy on prices and incomes, a policy which is established as a result of an order which can be, and often is, debated in the House. In this case it

was debated for eight hours in Committee.
Even the criteria by which the Board operates are subject to Parliamentary control. When the Board has taken a decision on those criteria, if the Government choose to make an Order prolonging a standstill because of an adverse report after a case has been examined against those criteria, once again that Order is specifically subject to Parliamentary control and can be debated, and invariably has been debated, in the House.

Mr. R. Carr: We have heard much about the safeguards of the negative procedure. In particular, the Undersecretary has just said that the criteria which the National Board must use must come before the House. He will recollect that so crowded was Government business that we had no opportunity to pray against the current General Considerations Order, which lays down the criteria. So what safeguard is that?

Mr. Hattersley: Although the right hon. Gentleman is right in saying that no Prayer was laid against that Order—

Mr. Carr: It was laid. There was no chance to debate it.

Mr. Hattersley: In a previous year hon. Members opposite forgot to table a Prayer against the General Considerations Order. There was a debate on the criteria this year, however. The right hon. Gentleman took part in that debate. It took place in the debate on devaluation or in the general Budget debate—one of those debates which goes on for day after day, one of which was devoted to the criteria, whether the White Paper was published in its previous form or not. He had many things to say about 3½ per cent. and the other criteria. If the House has not debated the White Paper, it has certainly debated the criteria included therein. That is only one of the safeguards.
There are other safeguards which the hon. Gentleman asked the House to consider and which the hon. Gentleman says are perhaps inadequate. But these offer the individual who may be affected by an Order the opportunity to make representations to the Prices and Incomes Board and to the Government, and require the Government to publish their intentions in


the appropriate gazettes in order that individuals who feel that representations are appropriate are given notice and warning that the time for representations has come, apply not only to the extension of standstills under previous Acts but to the entire apparatus for price reductions under this Bill. They apply under paragraphs (a) and (b) of Clause 4(2) and under Clause 4(3) and they list very carefully those procedures which must be gone through before a prices Order can be made and which are intended to safeguard the rights of the individual.
That leads naturally to the point about which the hon. Member for Honiton asked—the case of the individual company or firm about which the Prices and Incomes Board might make an adverse report and about which the Government might make a price reduction Order. This is legitimate debate, but it is reasonable only if we assume that the Government and the Board would take decisions according to the most bizarre principles. The Board is required to examine all cases according to criteria.
If a company is so near to the margin of profitability that the requirement that a price reduction should be made would put it out of business, for the Prices and Incomes Board to recommend a price reduction would almost certainly be going outside the criteria. I cannot believe that the extreme case which the hon. Gentleman suggests could or will happen. I hope that the House will not consider the efficacy of the new Clause on such a wild hypothesis.
I hope that hon. Members will consider the very reasonable point made by my hon. and learned Friend the Member for Northampton (Mr. Paget). He said —and I must agree with him—that he could not visualise a Committee of the House being an appropriate body to make the sort of inquiry and investigation which these individual cases imply. They are not simply matters of civil liberty. In fact, in the event, they would turn out to be something very different. They would turn out to be the examination of economic principles, of industrial statistics, of the state of the market and of people's views on where productivity was to be found and how prosperity was to be achieved.
The examination of such a set of principles seems to me an operation which a Committee of the House would not do to best advantage. It would not be in the interests of the House, nor in the interests of the people who made the appeals. We are conscious of the need to safeguard those people who may, because of the operation of this policy, feel that they are at least potential sufferers. We hope that that safeguard is in the Bill. We hope that the ultimate safeguard is the obligation to debate each Order if the Opposition choose to debate it and that the House will rest content with that.

Mr. Geoffrey Lloyd: I do not think that the Under-Secretary has removed our anxieties, which were the reason for the new Clause. The Bill makes no provision for appeals.
I understand the hon. Gentleman when he says that it is in the nature of general industrial legislation of this kind that people at the margin may find themselves in difficulties and may get hurt. But this is an important thing for us to understand when we represent people at the margin who may get hurt. I appreciate the argument that the big organisatians in industry have powerful associations which can put their case. I am much more concerned with the small firm and individuals in a small way of business.
7.15 p.m.
I accept that the hon. Gentleman is sincere when he says that he has not the slightest intention of using the powers in the Bill in an oppressive way. But it is interesting that our new Clause, which makes provision for appeals, should be debated on the day when, perhaps unluckily for the hon. Gentleman, his right hon. Friend has referred an individual under the powers which he already possesses.

Mr. Hattersley: I did not wish to pursue this point, but since it has been raised a second time perhaps I should deal with it. The right hon. Gentleman should not be confused by the headline in one newspaper. My hon. Friend the Under-Secretary of State said yesterday that the report made to the First Secretary would be examined. He did not say that it would be referred to the Board. Those are two very different things.

Mr. Lloyd: Perhaps there is a difference, but it is clear that the hon. Gentleman did not say that his right hon. Friend had not the power to do this. It has been shown that she has the power to do it. It is widely accepted in the country that she has the power to do it. My point is that the new Clause proposes that, if she did it and if the body which was mentioned earlier took a decision which, whatever the Parliamentary Secretary says, was penal in its effect on individuals or small firms, there would be provision for an appeal. Whether the Order results in an enforced reduction of income for an individual or in an enforced reduction of price for a firm, particularly a small firm, all the elements which the hon. Gentleman mentioned might be relevant, but for the individual it would be penal. It is like an enormous fine. We have heard of fines large enough to put a business right out of operation.
I referred earlier to the case concerning Hambros Bank in which an individual is powerful. This is where the question of appeal might arise. This is a man who can defend himself, but, nevertheless, the comment throughout the Press has been that action has been taken by the Government because he attacked the Government and made a substantial contribution to the funds of the Conservative Party. It may or may not be right, but because we feel that there should be the right of appeal to an impartial body the new Clause is very important. The abuse may not be so great in the case of a powerful personality who can rely on powerful elements in the body politic and the City of London to rally to his defence. But what about the small man in the provinces of whom nobody has heard?
This is the danger of operating this gigantic system of control which the Government are erecting in a way which may stifle the business life of a man and yet provides for no appeal. This is why I support the new Clause.

Mr. Graham Page: With leave, may I briefly answer some of the points made by the Under-Secretary.
The procedure which the hon. Gentleman outlined of representations to the Board, to the Minister, and so on, is a procedure of appeal to the Minister, Ministerial body or administrative body. That is quite distinct from what we are asking for, namely, the right of appeal, when an Order has been made, of an individual particularly affected by the Order. Written representations to the Minister are wholly insufficient. It is for the House to protect the individual by applying a procedure which is already recognised. It is no good saying that the individual will be protected by the Minister, who is judge and jury in his own cause.
Another point made by the hon. Gentleman was that the procedure for annulment of an Order is sufficient. I agree that if the Order is of general industrial application it is right that the House as a whole should debate it. Indeed, it would no doubt do so by way of a Prayer against the Order. But the negative procedure is a matter of hit or miss in this House at present. There are occasions when it is impossible to get the time to Pray against an Order. It may be that if the Order affects only one small firm or one individual the House will not find time for a Prayer against it.
We are proposing a special procedure which is already in existence, which has worked, despite what was said by the hon. and learned Member for Northampton (Mr. Paget), and which has been extended in recent legislation: the Water Resources Act; the Countryside Bill; the Gas Act; the Pipelines Act; and the Forestry Act. This procedure has been used in connection with property interests, but how much more important it is to use it in connection with private interests affected by this Bill. This is not, as the hon. Gentleman said, a procedure to prevent an Order being made or for anything to be done before an Order is made. It is to apply an appeal machinery which is already recognised by Parliament. This is not only a matter of Parliamentary procedure. It is a matter of constitutional importance that the House should continue to preserve the right of the individual to protect himself against the Executive.

Question put. That the Clause be read a Second time: —

Division No. 239.]
AYES
[7.22 p.m.


Alison, Michael (Barktton Ash)
Glyn, Sir Richard
Mitchell, David (Basingstoke)


Allason, James (Hemel Hempstead)
Godber, Rt. Hn. J. B.
Monro, Hector


Astor, John
Goodhart, Philip
Montgomery, Fergus


Atkins, Humphrey (M't'n &amp; M'd'n)
Goodhew, Victor
Morrison, Charles (Devizes)


Awdry, Daniel
Gower, Raymond
Mott-Radcliffe, Sir Charles


Baker, Kenneth (Acton)
Grant, Anthony
Munro-Lueas-Tooth, Sir Hugh


Baker, W. H. K. (Banff)
Grant-Ferris, R.
Murton, Oscar


Balniel, Lord
Gresham Cooke, R.
Nabarro, Sir Gerald


Barber, Rt. Hn. Anthony
Grieve, Percy
Neave, Airey


Batsford, Brian
Griffiths, Eldon (Bury St. Edmunds)
Nicholls, Sir Harmar


Beamish, Col. Sir Tufton
Curden, Harold
Noble, Rt. Hn. Michael


Bell, Ronald
Hall, John (Wycombe)
Nott, John


Bennett, Dr. Reginald (Gos. &amp; Fhm)
Hall-Davis, A. G. F.
Onslow, Cranley


Berry, Hn. Anthony
Hamilton, Lord (Fermanagh)
Orr, Capt. L. P. S.


Biffen, John
Hamilton, Michael (Salisbury)
Orr-Ewing, Sir Ian


Biggs-Davison, John
Harris, Frederic (Coryodon, N. W.)
Osborn, John (Hallam)


Birch, Rt. Hn. Nigel
Harrison, Brian (Maldon)
Page, Graham (Crosby)


Black, Sir Cyril
Harrison, Col. Sir Harwood (Eye)
Page, John (Harrow, W.)


Blaker, Peter
Harvey, Sir Arthur Vere
Pearson, Sir Frank (Clitheroe)


Boardman, Tom (Leicester, S.W.)
Hastings, Stephen
Peel, John


Body, Richard
Hay, John
Percival, Ian


Bossom, Sir Clive
Heald, Rt. Hn. Sir Lionel
Peyton, John


Boyle, Rt. Hn. Sir Edward
Heath, Rt. Hn. Edward
Pike, Miss Mervyn


Braine, Bernard
Heseltine, Michael
Pink, R. Bonner


Brewis, John
Higgins, Terence L.
Pounder, Rafton


Brinton, Sir Tatton
Hiley, Joseph
Powell, Rt. Hn. J. Enoch


Brown, Sir Edward (Bath)
Hill, J. E. B.
Price, David (Eastleigh)


Bruce-Gardyne, J.
Hirst, Geoffrey
Prior, J. M. L.


Bryan, Paul

Pym, Francis


Buck, Anthoy (Colchester)
Hogg, Rt. Hn. Quintin
Quennell, Miss J. M.


Bullus, Sir Eric
Holland, Philip
Ramsden, Rt. Hn. James


Burden, F. A.
Hordern, Peter
Rawilnson, Rt. Hn. Sir Peter


Campbell, B. (Oldham, W.)
Hornby, Richard
Rees-Davies, W. R.


Campbell, Gordon (Moray &amp; Nairn)
Howell, David (Guildford)
Renton, Rt. Hn. Sir David


Carr, Rt. Hn. Robert
Hunt, John
Rhys Williams, Sir Brandon


Channon, H. P. G.
Hutchison, Michael Clark
Ridley, Hn. Nicholas


Chionester-Clark, R.
Irvine, Bryant Godman (Rye)
Ridsdale, Julian


Clark, Henry
Jenkin, Patrick (Woodford)
Robson Brown, Sir William


Clegg, Walter
Jennings, J. C. (Burton)
Rodgers, Sir John (Sevenoaks)


Cooke, Robert
Johnson Smith, G. (E. Grinstead)
Rossl, Hugh (Hornsey)


Cooper-Key, Sir Neill
Jones, Arthur (Northants, S.)
Royle, Anthony


Cordle, John
Joplin, Michael
Russell, Sir Ronald


Corfield, F. V.
Joseph, Rt. Hn. Sir Keith
St. John-Stevas, Norman


Costain, A. P.
Kaberry, Sir Donald
Sandys, Rt. Hn. D.


Craddock, Sir Beresford (Spelthorne)
Kerby, Capt. Henry
Scott, Nicholas


Crosthwaite-Eyre, Sir Oliver
Kershaw, Anthony
Scott-Hopkins, James


Crouch, David
Kimball, Marcus
Sharpies, Richard


Crowder, F. P.
King, Evelyn (Dorset, S.)
Shaw, Michael (Sc'b'gh &amp; Whitby)


Cunningham, Sir Knox
Kirk, Peter
Silvester, Frederick


Currie, C. B. H.
Knight, Mrs. Jill
Smith, Dudley (W'wick &amp; L'mington)


Dalkeith, Earl of
Lancaster, Col. C. G.
Smith, John (London &amp; W'minster)


Dance, James
Lane, David
Speed, Keith


d'Avigdor-Goldsmid, Sir Henry
Langford-Holt, Sir John
Stainton, Keith


Dean, Paul (Somerset, N.)
Legge-Bourke, Sir Harry
Stodart, Anthony


Deedes, Rt. Hn. W. F. (Ashford)
Lewis, Kenneth (Rutland)
Stoddart-Scott, Col. Sir M. (Ripon)


Digby, Simon Wingfield
Lloyd, Rt. Hn. Ceoffrey(Sut'nC'dfield)
Summers, Sir Spencer


Dodds-Parker, Douglas
Lloyd, Ian (P'tsm'th, Langstone)
Tapsell, Peter


Donnelly, Desmorld
Lloyd, Rt. Hn. Selwyn (Wirral)
Taylor, Sir Charles (Eastbourne)


Doughty, Charles
Longden, Gilbert
Taylor, Edward M.(C'gow, Cathcart)


Drayson, G. B.
Loveys, W. H.
Teeling, Sir William


du Cann, Rt. Hn. Edward
Lubbock, Eric
Temple, John M.


Eden, Sir John
McAdden, Sir Stephen
Thatcher, Mrs. Margaret


Elliot, Capt. Walter (Carshalton)
MacArthur, Ian
Thorpe, Rt. Hn. Jeremy


Elliott, R. W. (N'c'tle-upon-Tyne, N.)
Mackenzie, Alasdair (Ross&amp;Crom'ty)
Tilney, John


Emery, Peter
Maclean, Sir Fitzroy
Turton, Rt. Hn. R. H.


Errington, Sir Eric
Macleod, Rt. Hn. lain
van Straubenzee, W. R.


Eyre, Reginald
McMaster, Stanley
Vaughan-Morgan, Rt. Hn. Sir John


Farr, John
Macmillan, Maurice (Farnham)
Wainwright, Richard (Colne Valley)


Fisher, Nigel
Maddan, Martin
Walker-Smith, Rt. Hn. Sir Derek


Fletcher-Cooke, Charles
Marten, Neil
Wall, Patrick


Portescue, Tim
Maude, Angus
Walters, Dennis


Foster, Sir John
Maudling, Rt. Hn. Reginald
Ward, Dame Irene


Fraser, Rt. Hn. Hugh (St'fford &amp; Stone)
Mawby, Ray
Weatherill, Bernard


Galbraith, Hn. T. G.
Maxwell-Hyslop, R. J.
Webster, David


Gibson-Watt, David
Maydon, Lt.-Cmdr. S. L. C.
Wells, John (Maidstone)


Gilmour, Ian (Norfolk, C.)
Mills, Peter (Torrington)
Whltelaw, Rt. Hn. William


Gilmour, Sir John (Fife, E.)
Mills, Stratum (Belfast, N.)
Williams, Donald (Dudley)


Glover, Sir Douglas
Miscampbell, Norman
Wills, Sir Gerald (Bridgwater)

The House divided: Ayes 241, Noes 300.

Wilson, Geoffrey (Truro)
Woodnutt, Mark



Winstanley, Dr. M. P.
Worsley, Marcus
TELLERS FOR THE AYES:


Wolrige-Gordon, Patrick
Wylie, N. R.
Mr. Jasper More and


Wood, Rt. Hn. Richard
Younger, Hn. George
Mr. Timothy Kitson.




NOES


Abse, Leo
Edwards, Robert (Billton)
Lee, Rt. Hn. Frederick (Newton)


Albu, Austen
Edwards, William (Merioneth)
Lee, Rt. Hn. Jennie (Cannock)


Allaun, Frank (Salford, E.)
Ellis, John
Lee, John (Reading)


Alldritt, Walter
English, Michael
Lestor, Miss Joan


Allen, Scholefield
Ennals, David
Lever, Harold (Cheetham)


Anderson, Donald
Ensor, David
Lever, L. M. (Ardwick)


Archer, Peter
Evans, Albert (Islington, S.W.)
Lewis, Arthur (W. Ham, N.)


Armstrong, Ernest
Fernyhough, E.
Lewis, Ron (Carlisle)


Atkinson, Norman (Tottenham)
Fitch, Alan (Wigan)
Lomas, Kenneth


Bacon, Rt. Hn. Alice
Fletcher, Ted (Darlington)
Loughlin, Charles


Bagier, Cordon A. T.
Foley, Maurice
Luard, Evan


Barnes, Michael
Foot, Michael (Ebbw Vale)
Lyon, Alexander W. (York)


Barnett, Joel
Ford, Ben
Lyons, Edward (Bradford, E.)


Baxter, William
Forrester, John
Mabon, Dr. J. Dickson


Beaney, Alan
Fowler, Gerry
McBride, Neil


Bence, Cyril
Fraser, John (Norwood)
McCann, John


Benn, Rt. Hn. Anthony Wedgwood
Ffeeson Reginald
MacColl, James


Bennett, James (G'gow, Bridgeton)
Galphern, Sir Myer
acDermot, Niall


Bidwell, Sydney
Gardner, Tony
Macdonald, A. H.


Binns, John
Garrett, W. E.
McGuire, Michael


Bishop, E. S.
Ginsburg, David
McKay, Mrs. Margaret


Blackburn, F.
Gordon Walker, Rt. Hn. P. C.
Mackenzie, Cregor (Rutherglen)


Blenklnsop, Arthur
Gourlay, Harry
Mackie, John


Boardman, H. (Leigh)
Gray, Dr. Hugh (Yarmouth)
Mackintosh, John P.


Booth, Albert
Greenwood, Rt. Hn. Anthony
Maclennan, Robert


Boston, Terence
Grey, Charles (Durham)
McMillan, Tom (Glasgow, C.)


Bottomley, Rt. Hn. Arthur
Griffiths, David (Rother Valley)
McNamara, J. Kevin


Boyden, James
Griffiths, Eddie
MacPherson, Malcolm


Braddock, Mrs. E. M.
Griffiths, Rt. Hn. James (Llanelly)
 Mallalieu,J.P.W.(Huddersfield,E.)


Bradley, Tom
Gunter, Rt. Hn. R. J.
Manuel, Archie


Bray, Dr. Jermy
Hamilton, James (Bothwell)
Marks,, Kenneth


Brooks, Edwin
Hamling, William
Marquand, David


Brown, Rt. Hn. George (Belper)
Hannan William
Marsh, Rt. Hn. Richard


Buchan, Norman
Hatterley, Roy
Mendelson, J.J.


Buchanan, Richard (G'gow, Sp'burn)
Hattersley, Roy
Mikardo, Ian


Butler, Herbert (Hackney, C.)
Hazell, Bert
Millan, Bruce


Butler, Mrs. Joyce (Wood Green)
Healey, Rt Hn. Denis
Millan, Bruce 


Callaghan, Rt. Hn. James
Heffer, Eric S.
Miller, Dr. M. S.


Cant, R. B.
Herbison, Rt. Hn. Margaret
Milne, Edward (Blyth)


Carmicheal, Neil
Herbison, Rt. Hn. Margaret
Mitchell, R. C. (S'th'pton, Test)


Cartor-Jones, Lewis
Hilton, W. S.
Molley,William


Castle, Rt. Hn. Barbara
Houghton, Rt. Hn. Douglas
Morgan, Elystan (Cardinganshire)


Chapman, Donald
Howarth, Harry (Wellingborough)
Morris, Alfred (Wythenshawe)


Coe, Denis
Howarth, Robert (Bolton, E.)
Morris, Charles R. (Openshawe)


coleman, Donald
How le, W.
Moyle, Roland


Concannon, J. D.
Hoy, James
Mulley, Rt. Hn. Fererick


Conlan, Bernard
Huekfield, Leslie
Murray, Albert


Corbet, Mrs. Freda
Hughes, Rt. Hn. Cledwyn (Anglesey)
Neal, Harold


Craddock, George (Bradford, S.)
Hughes, Emrys (Ayrshire, S.)
Newens, Stan


Crawshaw, Richard
Hughes, Hector (Aberdeen, N.)
Noel-Baker, Francis (Swindon)


Cronin, John
Hunter, Adam
Oakes, Gordon


Crosland, Rt. Hn. Anthony
Hynd, John
Ogden, Eric


Crosoman, Rt. Hn. Richard
Irvine, Sir Arthur (Edge Hilt)
O'Malley Brian


Cullon, Mrs. Alice
Jackson, Colin (B'h'se &amp; Spenb'gh)
Oram, Albert E.


Dalyell, Tam
Janner, Sir Barnett
Orme, Stanley


Darling, Rt. Hn. Ceorge
Jay, Rt. Hn. Douglas
Oswald Thomas


Davidson, Arthur (Accrington)
Jeger,i George (Goole)
Owen, Dr. David (Plymouth, S'tn)


Davies, Ednyfed Hudson (Conway)
Jeger,Mrs.Lena(HIb'n&amp;St.P'cras,E.)
Page Derek (Kins's Lvnn)


Davies, G. Elfed (Rhondda, E.)
Jenkins, Hugh (Putney)
Palmer Arthur


Davies, Dr. Ernest (Stretford)
Jenkins, Rt. Hn. Roy (Stechford)
park Trevor


Davies, Ifor (Gower)
Johnson, Carol (Lewisham, S.)
Parker, John (Danenham)


de Freitas, Rt. Hn. Sir Geoffrey
Johnson, James (K'ston-on-Hull W.)
Parkin, Ben (Paddlngton N )


Delargy, Hugh
Jones, Dan (Burnley)
Parkyn, Brian (Bedford)


Dell, Edmund
Jones,Rt.Hn.SirElwyn(W.Ham,S.)
Pavitt Laurence


Dempsey, James
Jones, J. Idwal (Wrexham)
Pearson, Arthur (Pontypridd)


Dewar, Donald
Jones, T. Alec (Rhondda, West)
Peart., Rt. Hn. Fred


Dobson, Ray
Judd, Frank
Pentland, Norman


Doig, Peter
Kelley, Richard
Perry, Ernest G. (Battersea, S.)


Driburg, Tom
Kenyon, Clifford
Prentice, Rt. Hn. R. E.


Dunn, James A.
Kerr, Mrs. Ann (R'ter &amp; Chatham)
Price, Christopher (Perry Barr)


Dunnett, Jack
Kerr, Dr. David (W'worth, Central)
Price, Thomas (WesthoughtonV


Dunwoody, Mrs. Gwyneth (Exeter)
Lawson, George
Price, William (Rugby)


Dunwoody, Dr. John (F'th &amp; C'b'e)
Leadbitter, Ted
Probert, Arthur


Eadie, Alex
Ledger, Ron
Randall, Harry







Rankin, John
Skeffington, Arthur
Wellbeloved, Junes


Rees, Merlyn
Slater, Joseph
Wells, William (Walsall, N.)


Reynolds, Rt. Hn. G. W.
Small, William
Whitaker, Ben


Rhodes, Geoffrey
Snow, Julian
White, Mrs. Eirene


Richard, Ivor
Spriggs, Leslie
Whitlock, William


Roberts, Albert (Normanton)
Steel, Thomas (Dunbartonshire, W.)
Wilkins, W. A.


Roberts, Rt. Hn. Goronwy (Caernarvon)
Stonehouse, Rt. Hn. John
Willey, Rt. Hn. Frederick


Roberts, Gwilym (Bedfordshire, S.)
Strauss, Rt. Hn. G. R.
Williams, Alan (Swansea, W.)


Robertson, John (Paisley)
Summerskill, Hn. Dr. Shirley
Williams, Alan Lee (Hornchurch)


Robinson, Rt. Hn. Kenneth (St.P'c'as)
Swingler, Stephen
Williams, Clifford (Abertillery)


Robinson, W. O. J. (Walth'stow, E.)
Symonds, J. B.
Williams, Mrs. Shirley (Hitchin)


Rodgers, William (Stockton)
Taverne, Dick
Williams, W. T. (Warrington)


Roebuck, Roy
Thomas, Rt. Hn. George
Willis, Rt. Hn. George


Rogers, George (Kensington, N.)
Thornton, Ernest
Wilson, Rt. Hn. Harold (Huyton)


Rose, Paul
Tinn, James
Wilson, William (Coventry, S.)


Ross, Rt. Hn. William
Tuck, Raphael
Winnick, David


Ryan, John
Urwin, T. W.
Woodburn, Rt. Hn. A.


Shaw, Arnold (Ilford, S.)
Varley, Eric G.
Woof, Robert


Sheldon, Robert
Wainwright, Edwin (Dearne Valley)
Wyatt, Woodrow


Shore, Rt. Hn. Peter (Stepney)
Walden, Brian (All Saints)
Yates, Victor


Short, Rt. Hn. Edward (N'c'tle-u-Tyne)
Walker, Harold (Doncaster)



Short, Mrs. Renée(W'hampton,N.E.)
Wallace, George
TELLERS FOR THE NOES:


Silkin, Rt. Hn. John (Deptford)
Watkins, David (Consett)
Mr. Joseph Harper and


Silkin, Hn. S. C. (Dulwich)
Watkins, Tudor (Brecon &amp; Radnor)
Mr. Ioan L. Evans.


Silverman, Julius
Weitzman, David

New Clause 7

DUTY OF NATIONAL BOARD FOR PRICES AND INCOMES TO CONSIDER EFFECT OF CHANGES OF PRICE, &C, ON EXPORT TRADE

6. Where under section 2(1) or 2(3) of the Prices and Incomes Act, 1966, as amended by this Act, any question is referred to the National Board for Prices and Incomes concerning prices for the sale of goods or charges for the performance of services, including charges for the application of any process to goods, or any awards or settlements relating to terms or conditions of employment, the Board shall consider the effects of any proposed changes in such prices "or" charges, or awards or settlements on the export trade (that is to say the provision of goods and services for persons not resident in the United Kingdom): and where the Board is directed under Section 4(1) of this Act to consider making recommendations for the reduction of prices or charges, the Board shall consider and report to the Minister or Ministers on the effects that such reduction in prices would, in its opinion, have on the export trade.— [Mr. Tom Boardman.]

Brought up, and read the First time.

Mr. Tom Boardman: I beg to move, That the Clause be read a Second time.

Mr. Speaker: I have suggested that with the new Clause we can take Amendment No. 47 in Clause 4, page 4, line 33, at end insert:
(7) None of the provisions of this section shall apply to a company which exports 75 per cent. or more of its products by value.

Mr. Boardman: The Clause requires the Board, on a reference to it for prices or charges, or for awards or settlements, to consider the effect on the export trade.

I am sure that it measures up to the right hon. Lady's criteria, and certainly measures up to what she said earlier about being patriotic.
The Clause is in conformity with the White Paper, which spelled out that the object of the Government's policy was the
transfer of resources from home consumption to producing goods for export and import saving …
The remarkable thing is that after that one passing reference to the development of our export trade no mention was made of it in the White Paper, in the Statutory Instrument which followed it, or in the Bill. It is the balance of our exports against imports which is critical and which is said to be the reason for these stern measures.
It may be that the Minister will rely on Section 9(1) of the 1966 Act. That section enables the Minister to make certain alterations if it appears that any directions made may impede the export trade, but there are certain objections to the section. First, it does not apply to awards or settlements. It applies only to orders or directions relating to prices or charges.

Mr. Speaker: Order. It is difficult for the hon. Member to address the House against a loud and sustained dialogue.

Mr. Boardman: It may be that an Order could be made against an award or settlement which was helpful to the export trade, and the Clause seeks to enable the question of exports to be taken into account when dealing with awards and settlements.
My main objection to any contention that Section 9 of the 1966 Act meets the purpose of the Clause is that it gives the Minister and not the Board, power to make the final judgment. When we discussed the promotion of exports in Committee, the Under-Secretary of State said:
There are times when the success of the export trade depends on the volume of domestic sales, but that is not invariably so. I know that the Committee has some reservations about this, but it is an opportunity for the Minister to use his or her judgment, as he is obliged to do. Clearly, it is variable, but when he believes that the application of prices policy domestically might impair export prospects, he must ensure that this does not happen. It is a matter of Ministerial judgment."—[OFFICIAL REPORT, Standing Committee F; 11th June, 1968, c. 658.]
The whole question of pricing is one of delicate complications for management decisions. It is impossible for the Minister to make the decisions, and that is why the Clause puts the onus on the Board to consider the merits of the export case. I share the feelings expressed earlier this afternoon that the Board is incapable of making decisions which only managements are able to make because the question of costing and pricing, when balancing between export prices and home prices, cannot be considered in isolation. It must be considered in the context of the overall costs of the group or company.
Many of the complications which are involved were highlighted in the Mallory Battery case, which is well known to the House. Referring to the problem of export prices, the Prices and Incomes Board Report No. 64, said, in paragraph 13:
Unless the prices are uniform it is difficult to preserve the integrity of one market as against another: with different prices products from the European factories might … enter the U.S.A. through a third party…
It ended:
… in the light of the complexities involved … each case will need to be looked at on its merits.
That, of course, is so. It is a matter of deciding whether one promotes exports on the basis of a firm home market. When a product is selling well at home, the firm has to decide whether it should accept a lower price on exports supported by the home price. There are also cases in which one is creating a new product for the overseas market.
In this case, this country should concentrate more on being market-orientated rather than production-orientated, which means looking for the product which the market requires. Then, the decision must be whether product A should carry an over-price so that the exportable product B can be developed and marketed. These are complex matters, requiring management decisions, and must not be left to the judgment of a Minister which cannot be challenged. In my constituency, where large numbers of shoes, engineering and hosiery products are exported, there is a constant and delicate balance in management between export prices and those for home market products. If a Ministry were to fix a price aribtrarily, that could distort the whole pattern of this type of export trade.
Amendment No. 47 would exclude from the power of price reduction a company whose exports were 75 per cent. or more of its total production, and this must be right. If a price reduction is imposed on such a firm, it will obviously be self-defeating, leading either to a two-tier price, lower at home than for exports, with all the problems described in the Mallory Batteries case—and if the overseas customer realises that he is paying more, that will cause problems—or to a price reduction right across the board, with the value of exports, 75 per cent. of production, being reduced. If a firm can sell 75 per cent. of its products overseas, it should surely be immune from the risk of a price reduction Order. Decisions in this matter should be based on considerations of exports.

7.45 p.m.

Mr. Biffen: My hon. Friend the Member for Leicester, South-West (Mr. Tom Boardman) argued his case cogently and I support him, especially in his arguments about the Mallory Battery Company, because the heart of the new Clause are the words:
 the Board shall consider the effects of any proposed changes in such prices ' or ✶ charges or awards or settlements on the export trade …
That is one way in which we can express our own doubts about the extent to which the Prices and Incomes Board has borne those considerations in mind in its recommendations so far.
It is important that we should take this opportunity, because the Mallory


Batteries case was referred to the Board after the original price change had been accepted, on notification, by the Ministry of Technology. In other words, it was a politically motivated reference following a certain amount of perfectly understandable outcry and political pressure. The Board's Report shows how politically sensitive a body it is. This lies at the heart of so much of our opposition, that it should have so much control and authority in determining economic factors. This is why a Clause like this, which seeks to represent our feeling that export trade considerations should loom much larger is of such vital importance.
This is especially so over one reference since the Mallory case, namely, the computer charges by I.B.M. When one considers how much we wish to see this country the centre of international companies operating a price structure which will often, and of necessity, be common through that part of the world market which they hope to control, it is essential that they shall not be manoeuvred into the two-price structure through sheer political motivation. The evidence so far available in the Mallory case, must, I fear, sustain the doubts which my hon. Friend has expressed. I fully support his argument and the necessity for voting on the new Clause.

Mr. Nicholas Ridley: I support my hon. Friends the Members for Leicester, South-West (Mr. Tom Boardman) and Oswestry (Mr. Biffen), although both found themselves in a difficulty in trying to fit the delicate economics of the price mechanism into the extraordinary political policy of this Bill. The two are, of course, flatly incompatiable. As I said earlier, it is like trying to mend a wristwatch with a crowbar. The result is. inevitablv damage to the mechanisms upon which a free market economy operates.
This problem is not immediately apparent on the home industrial scene: it is only when one begins to consider exporting that the glaring anomalies in forcing down and holding down prices by an Order under Clause 4 become evident.
We then have this curious invitation to a double standard on prices, if one considers exports. The Parliamentary Secretary went some way towards admitting this in Committee when he said

that it would be possible for there to be higher prices for exports and lower prices for identical goods in the home market. The tenor of his speech on that occasion tended to encourage the belief that if one could get more money for one's goods abroad, that was all right because it would mean more foreign exchange, but that if one tried to get more for the identical goods in the home market, one might have an order issued against one.
The economics of the situation point in the opposite direction. We should be trying to keep home market prices up so that we can export more by taking a smaller margin of profit on the exported goods. This is the basis of the argument of, for example, the motor industry; that we need a strong home market before we can export. This must mean that we should have a buoyant home market to enable firms to subsidise, as it were, their export customers and so compete with other countries.
In so far as this policy is valid—and I will not go into the merits or demerits of it now—it is obvious that the Government's policy will secure the reverse, with higher prices for exports and lower prices in the home market. The result will be that the goods produced by, for example, the car industry will be sucked into the home market at a price which is too low, with the result that the profits will not be high enough to enable the motor firms to make the necessary investment in plant. The result of that will be that the industry's growth prospects will be damaged, resulting in a choking off of investment in plant, with a consumer boom at home and with prices in the home market being kept low. Yet this is precisely what the Government are trying to do. Through a political motivated policy, they are window-dressing the fact that they are keeping down prices when what they really want to do is to clobber wage increases and pretend to the world that they are being fair.
What will happen if a firm successfully exports more and manages to force up its prices in export markets? Will it be entitled to pay its workers more for that reason alone? In other words, if there was no increase in productivity, would the mere fact that a firm has doubled its income by greater export effort entitle


it to pay, say, 20 per cent. more in wages? If not, the laudable policy of not wanting to put a limit on export prices will mean increased profits and share capital for exporting firms, while no benefit will go to the workers.
The conclusion which one must draw from studying the whole problem of what should be the policy governing export prices is the fundamental one that we live in a trading system consisting of a large number of countries which all operate free enterprise market economic systems. We have E.F.T.A., the Common Market and North America. If one country in the system goes in for a Statecontrolled system of prices, wages and so on, we begin to face a number of difficulties. One cannot establish a rigid, bureaucratic, centralised economic system in a country which trades with a large number of free enterprise market econimies. The difficulties are legion and one of the Socialist Government's economic difficulties about trade and exports has stemmed from the central fact that they are trying to put a pseudo-Communist system into a free enterprise world. It would be easier for us to trade with the Communist bloc if we were to adopt this type of policy than for us to continue to trade with the free world.
Be that as it may, the difficulty here is an absolute exposition of the unwisdom of trying to control one part of the market mechanism, which is prices for export, in isolation. The Parliamentary Secretary will, therefore, agree with the principle of the new Clause, even if he resists the Clause in total. If so, he is admitting the principle that one cannot satisfactorily combine a State-controlled prices and incomes policy with trading in a free economic system.

Mr. Kenneth Lewis: I support the new Clause. Even if the Minister cannot accept its drafting, he should accept its principle. We are dependent on an export boom and everything we do should be geared to that boom. It is of vital importance that we take note of the part of the new Clause which refers to
… awards or settlements relating to terms or conditions of employment …
since his right hon. Friend decided yesterday that she might put the question of Mr. Harnbro's rise to the N.B.P.I. The

hon. Gentleman will have noted that the firm in question has said that this rise is geared to the productivity of the company and that the individual is concerned in that the firm is concerned with exports and that, in so far as it is earning very heavy invisibles for this country, it would be reasonable that, arising out of those earnings, those who are involved in the direction of the firm should get a share of the reward.
In any event, the right hon. Lady will be in some difficulty in arguing the case against this rise if she bears in mind that the Chancellor is at present forcing directors of close companies to give themselves rises. She might, therefore, like to put my case to the N.B.P.I. since I have to give myself a rise of several hundred £s this year from my company. I did not wish to do so, but I was obliged to do so because the Chancellor told me that, as the director of a close company, I had to give myself a rise so that he could get it back, mostly by way of Income Tax and Surtax. I see the Minister shaking his head, presumably in disagreement, but I assure him that what I have said is correct and that it applies to directors in a similar position throughout the country.

Mr. Hattersley: The hon. Gentleman is wrong. My right hon. Friend would have been happy to have taxed the hon. Gentleman as if he had got the rise, even if he had not paid it to himself.

Mr. Lewis: I assure the Minister that he is wrong. He should be aware that if the money had been left in the company, as I would have wished, the Chancellor would have got a good deal less by way of tax than he gets as a result of directing me to pay myself more. The same can be said of directors not in their hundreds but in their thousands throughout the country.
If the Minister is reluctant to accept the new Clause because he does not think that we should relate these matters to exports, I remind him that, from the dividend point of view, we are apparently relating the matter to exports. His right hon. Friend has complained about Mr. Hambro, but the hon. Member for Buckingham (Mr. Maxwell) has increased his dividend by 8 per cent. this year. He increased it when we had a prices and incomes policy last year and he increased it the year before that'. The hon.


Member for Buckingham is a good free-enterprise industrialist who is earning a lot of money for Britain. He is increasing his business year by year and is therefore enabled to increase his dividend, which encourages his shareholders, who in turn will always provide him with more money when he wants to expand his business. He has increased his dividends this year by 8 per cent., having very large family holdings in the business, and he has had permission from the Treasury to do so. I hope the right hon. Lady will think it right and proper that as the hon. Member for Buckingham can increase his dividend by 8 per cent. and get a large increase for his family holdings, it is equally right for Mr. Hambro to increase his salary if it is justified on the ground of productivity.
8.0 p.m.
The Government are getting into a muddle because they are mixing politics with the real functions of the Ministry. The right hon. Lady is very good at politics and therefore, I suppose, in certain offices in the Government, and certainly in Opposition. From the action she has taken in the last 24 hours I think she has been a disaster as a Minister. Can anyone imagine anything worse during a go-slow than to draw the attention of people who are told they cannot have more money to a director who can have more?

Mr. Deputy Speaker (Mr. Sydney Irving): Order. I am having some difficulty in relating what the hon. Member is saying to the new Clause, which is concerned with prices.

Mr. Lewis: I accept that rebuke. If we want to increase exports, and that is the aim of the new Clause, Ministers must stop playing politics. They have to try to act as Ministers in order to get increased productivity. They not only have to act, but they have to talk on that basis.

Mr. Keith Speed: I find myself in some problem because, like some of my hon. Friends, I regard particular parts of this Bill dealing with price reductions as nonsensical for pricing is a more sophisticated arrangement. Nevertheless, it is our duty to try to

improve the Bill, although we regard large parts of it as completely unacceptable.
On the question of exports, there are some important points on which I hope the Minister will go along with us, even at this late stage. In the 1966 Act there was reference to exports, but not to price reductions. In Committee the Joint Parliamentary Secretary went a little way to acknowledging the fact when I raised problems of export policy of companies which are dependent on the home market. There has been argument about the motor trade in which 50 per cent. of the products may be exported. That trade from time immemorial has argued that it needs to have a strong home market to act as a springboard for its exports.
From time to time some of us have been a little suspicious about certain industries which have said that they need to have a secure home market so that they can export and then, as soon as hire purchase controls or other controls have been eased, we have found that the home market gets bigger and bigger and exports fewer and fewer. I am particularly concerned, and I declare a constituency interest, with industries, such as the cycle industry, which export a large amount of their products. In their pricing and marketing policy companies engaged in a high proportion of exports have to consider their total production. They tend to have different prices for different countries to which they are sending their products and the total production for this country has to fit into the overall marketing and pricing scheme.
In Committee the Parliamentary Secretary said that this is a question of Ministerial judgment. He is a politician, as I am, and from time to time political considerations might cloud his judgment. For example, there could well be a situation in which prices are rising particularly fast, we have the Index of Retail Prices and there is a clamour in the Press about "Mr. Rising Price" and so on. Then it might be convenient to have price reduction orders confirmed. If the Prices and Incomes Board were empowered to make observations and an assessment on the effect on exports of price reductions and if a company exporting more than 75 per cent. of its products by value were exempted, that would give some margin to companies—


of which by definition there will be a comparatively small number engaged in exports—in their pricing and marketing policies.
This proposal would give a safeguard to a part of the Bill which will be extremely difficult to work, if it is not unworkable for these companies. I therefore hope that the Minister will accept the new Clause.

Mr. Hattersley: Whenever we debate the prices provisions of the Bill, particularly when we consider powers to impose price reductions, we have a charming interlude in which the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) gives us a rather simple account of the theory of perfect competition. I am sure that he remembers that Professor Galbraith described it as, "unfortunately not sanctioned by reality". On that basis we have to begin to consider the sort of proposals made by the Opposition.
The hon. Member, having drawn our attention to the delicate mechanics of the price mechanism on which a free market operates, went on to say that the free market would be unbalanced or upset if the Government imposed a system of rigid price control. We have said many times, but it is still not accepted in some places, that the Government do not claim to be mounting a system of rigid price control. My right hon. Friend has said, and the Chancellor of the Exchequer has said, that all we can seek to do, all we can do, and all that it is economically possible in practice to do, on occasions when there are individual key prices whose increases seem to us to be unjustifiable, is to examine them and maybe seek to prohibit an increase or insist on a reduction. That is not a system of tight price control. This debate must be judged against that background.
As hon. Members opposite have said, I conceded—if "conceded" is the right word—in Committee, and I am happy to concede again tonight, that there is an absolute obligation on all those operating prices and incomes policies to make sure that any decision they make and any orders they make in this policy are not detrimental to the Government's policy of encouraging exports. Two possible difficulties which hon. Members opposite fear were perhaps best set out by the hon. Member for Meriden (Mr. Speed) who,

I thought, by implication at least drew two sorts of possible problems.
The first was the literal economic problem where a company feels that its export base in Britain must be sufficiently prosperous for it to mount and sustain the sales drives and all the other things that go into sales abroad. The second, I suppose, is a psychological problem—and this was also referred to by the hon. Member for Cirencester and Tewkesbury —the idea that the buyer abroad is sceptical of the value of a product if that product has had its price reduced on the home market as a result of Government intervention.
We understand exactly that the first problem exists. It was I in Committee who rashly conceded—rashly not in terms of the Committee discussion but in terms of general industrial policy—that it might be argued, and perhaps I was slightly influenced in my capacity as a Member of Parliament for the City of Birmingham, that a substantial domestic market had some relevance to the number of motor cars sold abroad. I accept that possibility, and I accept that the Government must take it into account when determining the price policy for motor cars, or for any other sector of the economy.
I do not take so readily to the argument that foreign buyers will be disenchanted at the prospect of buying British goods if they discover that the price they are paying is substantially smaller than the price that has been insisted upon in the home market by the Government. The hon. Member for Merideo talked about motor-cycle manufacturers in his constituency, all of whom have carefully graded prices which are intended to accommodate exactly what each foreign market would buy. No doubt, and I speak without experience, it would be a little more in Germany than in Italy and a little less in France than in Italy. I do not think he is arguing that buyers in Germany are put off because motorcycles are less expensive in Italy, or that buyers in France are put off because they are a little more expensive in the other two countries.
If there is to be an exporting prices policy, with a price geared to each individual national market, a price which the exporter has calculated is what the


market can bear, then there will be distinctions in prices from market to market, and I cannot believe that the export effort will be undermined if one of those distinctions is between the home market and individual foreign markets. Indeed, such distinctions clearly already exist, not by Government policy but by volume of sale abroad, transport costs and many other things.
It is a very sophisticated foreign buyer who says that the Meriden motorcycles —I hasten to tell the people in Meriden that I hypothesise wildly; I have no reason to assume this would be the case —were judged by the Government and by the National Board for Prices and Incomes to be 4s. 6d. over-priced and, since they have been reduced by that amount in Birmingham, they will not be bought in Rome, Berlin and Paris unless they are reduced by a similar amount. I do not believe that will operate, and I suspect by the look on his face that the hon. Member does not think that will operate either.
What he believes, and I agree with him entirely, is that in deciding our prices policy, and when we examine prices with a view to reducing them, we must take into account the export requirements. When I say "we must", I mean not only in common sense and reasonableness, but I remind the House that, under the powers by which the Prices and Incomes policy is operated, we are required statutorily to take that into account.
The hon. Member for Leicester, South-West (Mr. Tom Boardman) warned the House that I would refer to Section 4(1) of the 1966 Act, by which the current White Paper on Prices and Incomes policy is incorporated into the parent Act as a Schedule of criteria which must be taken into account when decisions are arrived at by the National Board for Prices and Incomes. His warning was absolutely right. That White Paper refers to the overriding need to stimulate exports. The National Board for Prices and Incomes in making its decisions must statutorily take that White Paper into account, and the White Paper makes it absolutely clear that its judgments must in some ways be guided by that consideration.
8.15 p.m.
Similarly, with the First Schedule to the 1968 Act, which lists the provisions in

previous Acts which we must take into account when considering the possibilities of price reduction and the warning of the hon. Member for Leicester, South-West, enables me to remind the House that Section 9(1) of the 1966 Act imposes an additional obligation on my right hon. Friend. If we assume, and I do not assume it for one moment, that the National Board for Prices and Incomes has ignored this requirement to examine all prices and all potential reductions in the light of the White Paper, and has therefore made an Order for a price reduction which is in flagrant breach of that undertaking and disregards the export implications, then my right hon. Friend is required to exclude from a prices Order, as she sees appropriate, anything that might be regarded as detrimental to the export trade.
When I said in Committee that this was to a degree a subjective decision, and something which must be done by her, I thought and I hoped that I was making a point that was no more than the semantic obvious, that if she is required to take into account all the things which seem to her appropriate for the encouragement of exports, I was doing no more than concede that what appears to be appropriate might vary from individual to individual. All that I could assure the Committee, and all that I can assure the House today, is that my right hon. Friend will operate that system according to her judgment and according to her ability. I do not believe that any possible price reductions which could be recommended by the National Board for Prices and Incomes, and which could be confirmed by way of an Order debated in the House, could be to the detriment of our export trade. We are required by Statute to take that into account. We are required by obligations inherent in the White Paper to make allowance for these things.
Nothing could be more arbitrary than an Amendment which seeks to exclude firms which have an export trade amounting to 75 per cent. of their turnover. From time to time my right hon. Friends and I are chided for our lack of industrial experience, but my industrial experience leads me to believe that it is not possible to point to a firm or group of firms who through time have 75 per cent. of


their business going to export. Sometimes it may be 74 per cent.; sometimes it may be 77 per cent. How one could make that calculation, how one could possibly say that this firm is above the 75 per cent. level and that firm is just below, I do not know.

Mr. John Page: It springs to mind at once that there are many commercial firms, as opposed to manufacturing firms, to whom this must apply, firms who concentrate entirely on export business.

Mr. Hattersley: Were I to make that point in another context, the hon. Gentleman would be the first to say to me that it is not enough to say that there are some firms we can describe in this way, since this requires the exercise of Ministerial judgment. He would say what he is worried about is how the Minister makes judgments about those firms around the margin. That is what I too am worried about in that context. I do not believe that the Minister could make that judgment, and I hope that the House will not try to impose that judgment upon us. I assure the House that we are most conscious of the export obligations; the White Paper and the Bill require us to remain conscious of them and that consciousness will continue.

Sir John Foster: The hon. Gentleman at the beginning of his answer said that it was wrong for my hon. Friends to say that a rigid system of price control was being imposed. My first observation is that obviously the Government are taking the power to impose a system of rigid price control.
He then went on to say, and he said also in another context, that the Government would act wisely and do this and that according to the best principles. He must realise that we have no confidence in the Government. We do not believe them when they say they have the intention to do this or that. If they mean it at the time they alter their intention within a very short time. Therefore, since we cannot rely upon their intentions, we submit that we need an Amendment which fetters their discretion.
The arguments on the Amendment have drawn attention to the fact that there may be two price structures. There may be a reduction of price ordered by the Government, and there may be a higher export price.
In the case of Mallory Batteries, it was the company trying to increase its price. The National Board for Prices and Incomes said that it did not think that the increase should take place and that, if there was a difference between the home price not raised and the export price raised, one of the ways of taking care of that was by putting on a conditional restriction.
That is a very naive suggestion. To put on a restriction to customers in the United Kingdom that they shall not resell the product abroad at a higher price and cut into the suppliers' own market is quite unreal. It shows that, apart from commercial considerations, by ordering a price reduction which brings the home price below the export price, some harm to the export trade must ensue.
As the National Board for Prices and Incomes adopted that view, when the right hon. Lady takes into account, as statutorily she must, the damage or otherwise to the export trade, we do not believe that she will apply the right principles. All that the Statute says is that she shall do her best according to her own subjective judgment. If she thinks that restrictive conditions imposed on the customers of a United Kingdom supplier will achieve the object of keeping the distinction between the home and the export prices, she is very much mistaken. We do not believe that she will use the right criteria when she performs her statutory duty of trying to protect the export market, and we do not believe that the intention of the Government will remain as it is today. It will change overnight.

Question put, That the Clause be read a Second time: —

The House proceeded to a Division—

Mr. John Wells: (seated and covered): On a point of order. Is it in order for a Teller on the Government side, in the Aye Lobby, to prevent hon Members from getting out of the Lobby?

Mr. Deputy Speaker: I must inquire into this. I am unaware of the circumstances. I will inquire into the matter.

Mr. Wells: (seated and covered): Further to that point of order, Mr. Deputy Speaker, have you now made your inquiries?

Mr. Deputy Speaker: I have been having inquiries made. There was some difficulty because the Division was proceeding. The reply to the point of order raised by the hon. Member for Maidstone (Mr. John Wells) is that, I understand the Tellers did put their arms across the door but it was to prevent any difficulties arising over counting and was merely to facilitate the flow so that counting could be carried through effectively. I am satisfied that no hon. Member was prevented from coming out of the Lobby on that account. Therefore, I take the Division to be perfectly regular.

Division No. 240.]
AYES
[8.22 p.m.


Allson, Michael (Barkston Ash)
du Cann, Rt. Hn. Edward
Joseph, Rt. Hn. Sir Keith


Allason, James (Hemel Hempstead)
Eden, Sir John
Kaberry, sir Donald


Astor, John
Elliot, Capt. Walter (Carshalton)
Kerby, Capt. Henry


Awdry, Daniel
Elliott, R.W.(N'c'tle-upon-Tyne,N.)
Kershaw, Anthony


Baker, Kenneth (Acton)
Emery, Peter
Kimball, Marcus


Baker, W. H. K. (Banff)
Errington, Sir Eric
King, Evelyn (Dorset, S.)


Balniel, Lord
Eyre, Reginald
Kirk, Peter


Barber, Rt. Hn. Anthony
Farr, John
Kitson, Timothy


Batsford, Brian
Fisher, Nigel
Knight, Mrs. Jill


Bell, Ronald
Fletcher-Cooke, Charles
Lane, David


Bennett, Dr. Reginald (Gos. &amp; Fhm)
Fortescue, Tim
Langford-Holt, Sir John


Berry, Hn. Anthony
Foster, Sir John
Lewis, Kenneth (Rutland)


Biffen, John
Fraser,Rt.Hn.Hugh(St'fford &amp; Stone)
Lloyd,Rt.Hn.Geoffrey(Sut'C'dfield)


Biggs-Davison, John
Galbraith, Hn. T. G.
Lloyd, Ian (P'tsm'th, Langstone)


Birch, Rt. Hn. Nigel
Gibson-Watt, David
Lloyd, Rt. Hn. selwyn (Wirral)


Black, Sir Cyril
Gilmour, Ian (Norfolk, C.)
Longden, Gilbert


Blaker, Peter
Gilmour, Sir John (Fife, E.)
Loveys, W. H.


Boardman, Tom (Leicester, S.W.)
Glover, Sir Douglas
Lubbock, Eric


Body, Richard
Glyn, Sir Richard
McAdden, Sir Stephen


Bossom, Sir Clive
Godber, Rt. Hn. J. B.
MacArthur, Ian


Boyle, Rt. Hn. Sir Edward
Goodhart, Philip
Mackenzie,Alasdair(Ross&amp;Crom'ty)


Braine, Bernard
Goodhew, Victor
Maclean, Sir Fitzroy


Brewis, John
Gower, Raymond
Macleod, Rt. Hn. lain


Brinton, Sir Tatton
Grant, Anthony
McMaster, Stanley


Brown, Sir Edward (Bath)
Grant-Ferris, R.
Macmillan, Maurice (Farnham)


Bruce-Gardyne, J.
Gresham Cooke, R.
Maddan, Martin


Bryan, Paul
Grieve, Percy
Maginnis, John E.


Buck, Antony (Colchester)
Griffiths, Eldon (Bury St. Edmunds)
Marten, Neil


Bullus, Sir Eric
Gurden, Harold
Maude, Angus


Burden, F. A.
Hall, John (Wycombe)
Maudling, Rt. Hn. Reginald


Campbell, B. (Oldham, W.)
Hall-Davis, A. G. F.
Mawby, Ray


Campbell, Gordon (Moray &amp;Nairn)
Hamilton, Lord (Fermanagh)
Maxwell-Hyslop R. J.


Carr, Rt. Hn. Robert
Hamilton, Michael (Salisbury)
Maydon, Lt.-Cmdr. S. L. C.


Channon, H. P. G.
Harris, Frederic (Croydon, N.W.)
Mills, Peter(Torrington)


Chichester-Clark, R.
Harrison, Brian (Ma'don)
Mills, Stratton (Belfast, N.)


Clark, Henry
Harrison, Col. Sir Harwood (Eye)
Miscampbell, Norman


Clegg, Walter
Harvey, Sir Arthur Vere
Mitchell, David (Basingstoke)


Cooke, Robert
Hastings, Stephen
Monro, Hector


Cooper-Key, Sir Neill
Hay, John
Mortgomery, Fergus


Cordle, John
Heald, Rt. Hn. Sir Lionel
Morrison, Charles (Devizes)


Corfield, F. V.
Heath, Rt. Hn. Edward



Costain, A. P.
Heseltine, Michael
Mott-Radclytfe, Sir Charles


Craddock, Sir Beresford (Spelthorne)
Higgins, Terence L.
Munro-Lucas-Tooth, Sir Hugh


Crosthwaite-Eyre, Sir Oliver
Hiley, Joseph
Murton, Oscar


Crouch, David
Hill, J. E. B.
Nabarro, Sir Gerald


Crowder, F. P.
Hirst, Geoffrey
Neave, Airey


Cunningham, Sir Knox
Holland, Philip
Nicholls, Sir Harmar


Currie, G. B. H.
Hornby, Richard
Noble, Rt. Hn. Michael


Dalkeith, Earl of
Howell, David (Guildford)
Nott, John


Dance, James
Hunt, John
Onslow, Cranley


d'Avigdor-Goldsmid, Sir Henry
Hutchison, Michael Clark
Orr, Capt. L. P. S.


Dean, Paul (Somerset, N.)
Irvine, Bryant Godman (Rye)
Orr-Ewing, Sir Ian


Deedes, Rt. Hn. W. F. (Ashford)
Jenkin, Patrick (Woodford)
Osborn, John (Hailam)


Digby, Simon Wingfield
Jennings, J. C. (Burton)
Page, Graham (Crosby)


Dodds-Parker, Douglas
Johnson Smith, G. (E. Grinstead)
Page, John (Harrow, W.)


Doughty, Charles
Jones, Arthur (Northants, S.)
Pardoe, John


Drayson, G. B.
Jopling, Michael
Pearson, Sir Frank (Clitheroe)

Mr. Wells: (seated and covered): No hon. Member was prevented from coming out because I happened to be stronger than the hon. Member concerned. But is it not disgraceful that an hon. Member on the Government side should use physical force to restrain an hon. Member on the Opposition side from coming out of the Lobby?

Mr. Deputy Speaker: The hon. Gentleman did succeed in getting out. I understand that no one was prevented from getting out. Therefore the Division must stand.

The House divided: Ayes 235 Noes 307.

Peel, John
Sandys, Rt. Hn. D.
Wainwright, Richard (Coine Valley)


Percival, Ian
Scott, Nicholas
Walker-Smith, Rt. Hn. Sir Derek


Peyton, John
Scott-Hopkins, James
Wall, Patrick


Pike, Miss Mervvn
Sharples, Richard
Walters, Dennis


Pink, R. Bonner
Shaw, Michael (Sc'b'gh A Whitby)
Ward, Dame Irene


Pounder, Rafton
Silvester, Frederick
Weatherill, Bernard


Powell, Rt. Hn. J. Enoch
Smith, Dudley (W'wick A L'mington)
Webster, David


Price, David (Eastleigh)
Smith, John (London &amp; W'minster)
Wells, John (Maidstone)


Prior, J. M. L.
Speed, Keith
Whitelaw, Rt. Hn. William


Pym, Francis
Stainton, Keith
Williams, Donald (Dudley)


Quenneil, Miss J. M.
Stodart, Anthony
Wills, Sir Gerald (Bridgwater)


Ramsden, Rt. Hn. James
Stoddart-Scott, Col. Sir M.(Ripon)
Wilson, Geoffrey (Truro)


Rawlinson, Rt. Hn. sir Peter
Summers, Sir Spencer
Winstanley, Dr. M. P.


Rees-Davies, W. R.
Tapsell, Peter
Wolrige-Gordon, Patrick


Renton, Rt. Hn. Sir David
Taylor, Sir Charles (Eastbourne)
Wood, Rt. Hn. Richard


Rhys Williams, Sir Brandon
Taylor, Edward M. (G'gow,Cathcart)
Woodnutt, Mark


Ridley, Hn. Nicholas
Teeling, Sir William
Worsley, Marcus


Ridsdale, Julian
Temple, John M.
Wylie, N. R.


Rodgers, Sir John (Sevenoaks)
Thatcher, Mrs. Margaret
Younger, Hn. George


Rossi, Hugh (Hornsey)
Tilney, John



Royle, Anthony
Turton, Rt. Hn. R. H.
TELLERS FOR THE AYES:


Russell, Sir Ronald
van Straubenzee, W. R.
Mr. Jasper More and


St. John Stevas, Norman
Vaughan-Morgan, Rt. Hn. Sir John
Mr. Humphrey Atkins.




NOES


Abse, Leo
Davidson, Arthur (Accrrington)
Healey, Rt. Hn. Denis


Albu, Austen
Davies, Ednyfed Hudson (Conway)
Heffer, Eric S.


Allaun, Frank (Salford, E.)
Davies, G. Elfed (Rhondda, E.)
Henig, Stanley


Alldritt, Walter
Davies, Dr. Ernest (Stretford)
Herblson, Rt. Hn. Margaret


Allen, Scholefield
Davies, Ifor (Gower)
Hilton, W. S.


Anderson, Donald
de Freitas, Rt. Hn. Sir Geoffrey
Houghton, Rt. Hn. Douglas


Archer, Peter
Delargy, Hugh
Howarth, Harry (Wellingborough)


Atkinson, Norman (Tottenham)
Dell, Edmund
Howarth, Robert (Bolton, E.)


Bacon, Rt, Hn. Alice
Dempsey, James
Howed, Denis (Small Heath)


Bagier, Gordon A. T.
Dewar, Donald
Howie, W.


Barnes, Michael
Dickens, James
Hoy, James


Barnett, Joel
Dobson, Ray
Huckfield, Leslie


Baxter, William
Doig, Peter
Hughes, Rt. Hn. Cledwyn (Anglesey)


Beaney, Alan
Driberg, Tom
Hughes, Emrys (Ayrshire, S.)


Bence, Cyril
Dunnett, Jack
Hughes, Hector (Aberdeen, N.)


Benn, Rt. Hn. Anthony Wedgwood
Dunwoody, Mrs. Gwyneth (Exeter)
Hunter, Adam


Bennett, James (G'gow, Bridgeton)
Dunwoody, Dr. John (F'th A C'b'e)
Hynd, John


Bidwell, Sydney
Eadie, Alex
Irvine, Sir Arthur (Edge Hill)


Binns, John
Edwards, Robert (Bilston)
Jackson, Colin (B'h'se &amp; Spenb'gh)


Bishop, E. S.
Edwards, William (Merioneth)
Jackson, Peter M. (High Peak)


Blackburn, F.
Ellic, John
Janner, Sir Barnett


Blenkinsop, Arthur
English, Michael
Jay, Rt. Hn. Douglas


Boardman, H. (Leigh)
Ennals, David
Jeger, George (Goole)


Booth, Albert
Ensor, David
Jeger, Mrs. Lena (H'b'n &amp; St.P'cras,S.)


Boston, Terence
Evans, Albert (Islington, S.W.)
Jenkins, Hugh (Putney)


Bottomley, Rt. Hn. Arthur
Evans, loan L. (Birm'h'm, Yardley)
Jenkins, Rt. Hn. Roy (Stechford)


Boyden, James
Fernyhough, E.
Johnson, Carol (Lewisham, s.)


Braddock, Mrs E. M.
Fitch, Alan (Wigan)
Johnson, James (K'ston-on-Hull, W.)


Bradley, Tom
Fletcher, Ted (Darlington)
Jones, Dan (Burnley)


Bray Dr Jeremy
Foley, Maurice
Jones, Rt. Hn. Sir Elwyn (W.Ham, S.)


Brooks Edwin
 Foot, Michael (Ebbw Vale)
Jones, J. Idwal (Wrexham)


Brown, Rt. Hn. George (Belper)
Ford, Ben
Jones, T. Alec (Rhondda, West)


Brown, Hugh D. (G'gow, Provan)
Forrester, John
Judd, Frank


Brown, Bob (N'c'tle-upon-Tyne,W.)
Fowler, Gerry
Kelly, Richard


Brown, R. W.(Shoreditch &amp;F'burn)
Fraser, John (Norwood)
Kenyon, Clifford


Buchan, Norman
Freeson, Reginald
Kerr, Mrs. Anne (R'ter &amp; Chatham)


Buchanan, Richard (G'gow, Sp'burn)
Galpem, Sir Myer
Kerr, Dr. David (W'worth, Central)


Butler, Herbert (Hackney, C)
Gardner, Tony
Lawson, George


Butler, Herbert (Hackney, C.)
Garrett, W. E.
Leadbitter, Ted


Butler Mr,. Joyce (Wood Green)
Garrett, W.E.
Leadbitter, Ted



Ginsburg, David
Ledger, Ron


Cant, R. B.
Gordon Walker, Rt. Hn. P. C.
Lee, Rt. Hn. Frederick (Newton)


Carmichael, Neil
Gourlay, Harry
Lee, Rt. Hn. Jennie (Cannock)


Carter-Jones, Lewis
Gray, Dr. Hugh (Yarmouth)
Lee, John (Reading)


Castle, Rt. Hn. Barbara
Greenwood, Rt. Hn. Anthony
Lestor, Miss Joan


Chapman, Donald
Cray, Charles (Durham)
Lever, Harold (Cheetham)


Cm, Denis
Griffiths, David (Rother Valley)
Lever, L. M. (Ardwiok)


Coleman, Donald
Griffiths, Eddie
Lewis, Arthur (W. Ham, N.)


Concannon, J. D.
Griffiths, Rt. Hn. James (Llanelly)
Lewis, Ron (Carlisle)


Conlan, Bernard
Gunter, Rt. Hn. R. J.
Lomas, Kenneth


Corbet, Mrs, Freda
Hamilton, James (Bothwell)
Loughlin, Charles


Craddock, Ceorge (Bradford, S.)
Hamilton, William (Fife, W.)
Luard, Evan


Crawshaw, Richard
Hamling, William
Lyon, Alexander W. (York)


Cronin, John
Hannan, William
Lyons, Edward (Bradford, E.)


Crosland, Rt. Hn. Anthony
Harrison, Walter (Wakefield)
Mabon, Dr. J. Dickson


Crossman, Rt. Hn. Richard
Hart, Rt. Hn. Judith
McBride, Neil


Cullen, Mrs. Alice
Haseldine, Norman
McCann, John


Daly en, Tarn
Hattersley, Roy
MacColl, James


Darling, Rt. Hn. George
Hazeil, Bert
MacDermot, Niall

Macdonald, A. H.
Owen, Dr. David (Plymouth, S'tn)
Small, William


McGuire, Michael
Page, Derek (King's Lynn)
Snow Julian


McKay, Mrs. Margaret
Palmer, Arthur
Spriggs, Leslie


Mackenzie, Gregor (Rutherglen)
Pannell, Bt. Hn. Charles
Steele, Thomas (Dunbartonshire, W.)


Mackie, John
Park, Trevor
Stonehouse, Rt. Hn. John


Mackintosh, John p.
Parker, John (Dagenham)
Strauss, Bt. Hn. G. B.


Maclennan, Robert
Parkin, Ben (Paddington, N.)
Summerskill, Hn. Dr. Shirley


McMillan, Tom (Glasgow, C.)
Parkyn, Brian (Bedford)
Swingler, Stephen


McNamara, J. Kevin
Pavitt, Laurence
Symonds, J. B.


MacPherson, Malcolm
Pearson, Arthur (Pontypridd)
Taverne, Dick


Mahon, Peter (Preston, S.)
Peart, Rt. Hn. Fred
Thomas, Rt. Hn. George (Cardiff,W.)


Mahon, Simon (Bootle)
Pentland, Norman
Thornton, Ernest


Mallalieu,J.P.W.(Huddersfield,E.)
Perry, Ernest G. (Battersea, S.)
Tinn, James


Manuel, Archie
Prentice, Rt. Hn. B. E.
Tuck, Raphael


Marks, Kenneth
Price, Christopher (Perry Barr)
Urwin, T. W.


Marquand, David
Price, Thomas (Westhoughton)
Varley, Eric G.


Marsh, Rt. Hn. Richard
Price, William (Rugby)
Walden, Brian (All Saints)


Mason, Rt. Hn. Roy
Probert, Arthur
Walker, Harold (Doncaster)


Maxwell, Robert
Randall, Harry
Wallace, George


Mayhew, Christopher
Rankin, John
Watkins, David (Consett)


Mellish, Rt. Hn. Robert
Rees, Merlyn
Watkins, Tudor (Brecon &amp; Radnor)


Mendelson, J. J.
Reynolds, Rt. Hn. G. W.
Weitzman, David


Mikardo, Ian
Rhodes, Geoffrey
Wellbeloved, James


Millan, Bruce
Richard, Ivor
Wells, William (Wasall, N.)


Miller, Dr. M. S.
Roberts, Albert (Normanton)
Whitaker, Ben


Milne, Edward (Blyth)
Roberts, Rt. Hn. Goronwy
White, Mrs. Eirone


Mitchell, R. C. (S'th'pton, Test)
Roberts, Gwilym (Bedfordshire, S.)
Whitlock, William


Molloy, William
Robertson, John (Paisley)
Wilkins, W. A.


Moorman, Eric
Robinson, Rt. Hn. Kenneth(St.P'c'as)
Willey, Rt. Hn. Frederick


Morgan, Elystan (Cardiganshire)
Robinson, W. O. J. (Walth'stow, E.)
Williams, Alan (Swansea, W.)


Morris, Alfred (Wythenshawe)
Rodgers, William (Stockton)
Williams, Alan Lee (Hornchurch)


Morris, Charles R. (Openshaw)
Roebuck, Roy
Williams, Clifford (Abertillery)


Morris, John (Aberavon)
Rogers, George (Kensington, N.)
Williams, Mrs. Shirley (Hitchin)


Moyle, Roland
Rose, Paul
Williams, W. T. (Warrington)


Mulley, Rt. Hn. Frederick
Ross, Rt. Hn. William
Willis, Rt. Hn. George


Murray, Albert
Rowlands, E. (Cardiff, N.)
Wilson, Rt. Hn. Harold (Huyton)


Neal, Harold
Shaw, Arnold (Ilford, S.)
Wilson, William (Coventry, S.)


Newens, Stan
Sheldon, Robert
Winnick, David


Noel-Baker, Francis (Swindon)
Shore, Rt. Hn. Peter (Stepney)
Woodburn, Rt. Hn. A.


Noel-Baker, Rt. Hn. Philip(Derby,S.)
Short, Rt. Hn. Edward (N'c'tle-u-Tyne)
Woof, Robert


Oakes, Gordon
Short, Mrs. Renée (W'hampton,N.E.)
Wyatt, Woodrow


Ogden, Eric
Silkin, Rt. Hn. John (Deptford)
Yates, Victor


O'Malley, Brian
Silkin, Hn. S. C. (Dulwich)



Oram, Albert E.
Silverman, Julius (Aston)
TELLERS FOR THE NOES:


Orme, Stanley
Skeffington, Arthur
Mr. Joseph Harper and


Oswald, Thomas
Slater, Joseph
 Mr. Ernest Armstrong.

Clause 1

CONTINUATION OF PART II OF PRICES AND INCOMES ACT 1966

Mr. Park: I beg to move Amendment No. 3, in page 1, line 7, leave out '22' and insert '12'.
This is perhaps the most important, certainly one of the most important, Amendments which we shall discuss. Its purpose is to delete the reference to those Sections in Part II of the 1966 Act which relate to terms and conditions of employment, and in particular to delete from the Bill the reference to what has become known as the punitive Section—Section 16—especially Section 16(4), which subjects trade unions and trade unionists to legal penalties for carrying out the policies and purposes for which trade unions exist.
There are many reasons for the Amendment. I shall not deal with them all. I have no doubt that some of my hon. Friends who will fellow me will find

no difficulty in rectifying any omissions I may make. I will confine myself to two points. First, it is a basic infringement of the liberties of a democratic society to subject to the penalties of the criminal law the right of trade unions to seek to maintain and improve the living conditions of their members.
This Section of the 1966 Act threatens to make criminals of trade union officers who are paid by their members to work on their behalf. It puts the clock of freedom back nearly 100 years. It invokes memories of the harsh and repressive legislation of the early years of the 19th century. It gives the Government the stigma of imposing an attitude of authoritarianism which was out-dated even before the end of the 18th century.
That the Government should have introduced this kind of Measure in 1966 was almost inconceivable. That, having introduced it, and having aroused the anger and distrust of those who had previously been their most loyal supporters, they should now seek the extension of


these powers passes the bounds of credibility. Do not the Government realise that the policy of imposing an incomes policy by punitive legislation has been roundly condemned by the Trades Union Congress, by one individual trade union after another, by the vast majority of trade union members, and, last but by no means least, by the electors whose interests we are supposed to represent here?
Why, then, must the Government persist with a policy which has been so clearly rejected? Having persisted in the policy, do the Government believe that the policy can work? I do not believe that it can. If the Government seek to implement this provision, they will propel themselves headlong into a major clash with the trade union movement and with the millions of people whom that movement represents.
If the Government do not believe that, if they do not realise that the danger of a clash with the trade union movement exists, I recommend them to read again the report of the conference of trade union executives in February this year. One trade union leader after another came to the rostrum not simply to condemn the Government's approach, not just to say that the punitive clauses were disastrously wrong, but to make clear that they intend to defy legislation of the kind which we have here.
Are the Government willing to pay the price of their determination to persist in the coercive approach? Are they willing to fine trade unionists, and to throw them into prison if they refuse to pay the fines? Are they willing to break up and destroy the unity of the political and industrial wings of the Labour movement? Are they willing to jeopardise all our hopes of economic recovery by a wave of industrial unrest affecting some of our vital export industries? I do not believe that they are. If they reach the brink, the Government will tremble but they will not go over it. They will capitulate first.
I commend to the Government's attention what happened in the Republic of Ireland only a few months ago. The Irish Government introduced legislation to outlaw strikes in electricity supply. A few months later they fined some strikers, and, when the strikers did not pay the fines, they put some of their leaders in prison. As soon as this happened, the

whole electricity industry in that country was threatened with standstill. Then the legal processes were thrown violently into reverse. The situation ended with the Government's legal powers thoroughly discredited and the electricity board paying the strikers' fines.
If a comparable situation were to occur in this country, Government and Parliament alike would be put in an utterly invidious position. We should have passed a law which, at the first moment of major challenge, we dare not apply, and even, perhaps, had no intention of applying at the time we passed it. If that be the position, why go to all the trouble of trying to pass it in the first place? Would it not be more sensible to drop the thing now, when it can be dropped honourably, rather than face a position of total retreat and lack of dignity at a later stage? Why cannot the Government acknowledge the realities of the situation? Why cannot they say at this stage that they recognise that they are trying to push through the House a Bill, or a section of a Bill, which will prove to be totally inoperative?
Time and again, the Government have told us that they seek a voluntary incomes policy, that legislation is only a long-stop, a reserve power, and they hope that it will not be necessary to renew it. One cannot run a voluntary policy in double harness with coercive legislation. It just will not work.
8.45 p.m.
You cannot convince someone of your friendship by threatening to knock him over the head with a mallet if he does not agree with you. It is just not on. I want to see a voluntary incomes policy work no less than my right hon. and hon. Friends on the Front Bench. I want to see a voluntary policy based on the planned rise of living standards, and there is only one way in which the Government can give that policy a chance to succeed. That is by accepting the Amendment, even at this late stage. If they are not prepared to accept it, on an issue of such crucial importance my hon. Friends and I will not hesitate to divide the House.

Mr. Ray Mawby: I very much agree with what the hon. Member for Derbyshire, South-East (Mr. Park) has said. It brings us back again to the basic point we discussed in Committee


on the whole question of principle. The right hon. Lady said in Committee that the leaders of the T.U.C. were men of standing in the community concerned with the future of the nation, and not only the interests of their own members but the industry in which they worked. She paid great tribute to them, but she treated them rather as a sergeant-major treats his men. In other words, she said, "We hope that you will make voluntary agreements, but if you do not the chopper will fall and I, as Minister, will take legislative action to make certain that you do what we believe you should do."
The Sections which the hon. Gentleman and his hon. Friends wish to leave out of the 1966 Act are those which deal with the whole question of legislative control of incomes. This is very important. Either the Government believe in free collective negotiation or they do not. If they do not, they should say so, and if they introduce this sort of legislation they should be prepared to say, "We believe that the accepted free negotiating system as we have known it has now gone, and the Government will decide what shall be the wages or incomes of employed people throughout the country, regardless of all the conditions that have applied before."
But that is not what the right hon. Lady is saying. She is saying that we should ask all those engaged in industry to meet to negotiate, and hope and keep our fingers crossed that voluntarily they will not negotiate any wage or salary increases of more than 3½ per cent. But if they do, we shall use the chopper and say, "Regardless of your free negotiating arrangements, the Government will prevent you from doing it."
The important point here is Section 16(4) of the 1966 Act. This makes it quite clear that
If any trade union or other person takes, or threatens to take any action, and in particular any action by way of taking part, or persuading others to take part, in a strike, with a view to compel, induce or influence any employer to implement an award or settlement …
which is in contravention of the present view of the Government, there can be on summary conviction a fine not exceeding £100 or on indictment a fine

which, if the offender is not a body corporate—and we are not at present dealing with bodies corporate—shall not exceed £500.
The hon. Member is on an important point. Section 16 of the 1966 Act creates a situation in which any trade unionist or group of trade unionists deciding to use the right to free collective bargaining, to independent arbitration and to strike if they believe there is no other way of solving their problems—a right which the Government say they are entitled to use—can, if they have the audacity to exercise that right, make themselves liable to a fine not exceeding £100 or, on indictment, £500.
In this case, other legislation has caught up with us. The person concerned, if he is fined £100 but refuses to pay, could have an attachment of wages order applied against him under which the fine would be deducted weekly from his wages. It will give no satisfaction to an employee if instead of his going to jail for refusing to pay the fine, it is deducted from his wages. Of course, the Government could put in the bailiffs, but again it would be no consolation to the individual that, instead of going to jail, he would have his television or front-room suite taken away.
These are the facts of the Bill. The hon. Gentleman is right in seeking to delete this provision. If the Government want to retain it, then the right hon. Lady must tell us that the Government do not believe in free negotiation, arbitration or the right to strike. If she does, then at least we shall see honest government for the first time from the present Administration. Unless she is prepared to do it, I am prepared to go into the Lobby in support of the Amendment.

Mr. Eric Heffer: Like many other hon. Members, I am a little tired of having, on various occasions, rather like a long drawn out period of intense agony, constantly to speak against the Government's policy in relation to this Bill. If it were not so serious a matter, it would be totally hilarious. But it is terribly serious. It can affect the whole future of industrial relations and the trade union and Labour movement. I support the Amendment because it is concerned only with excluding the wages control and the penal


Clauses connected with it. It does not deal in any way with the control of prices or dividends—a fact which I am sure commends itself to hon. Members opposite.
I hope that on this occasion they will be prepared to support my hon. Friend's Amendment. This would make a mockery of much of what they have said about other legislation which they would bring in if, God forbid, they ever regained a majority in the House. I have four reasons for supporting the Amendment. Let us look at the wartime experience when there was legislation containing penal provisions, and which put a number of trade unionists in prison. All hon. Members will have waded through the document called the Royal Commission on Trade Unions and Employers' Associations. At the end there is an extremely well-written passage, the most hilarious thing that I have read for a long time, written by Sir Harold Emmerson, K.C.B., K.V.O. on mass prosecution in war time. He says that a strike took place at Betts-hanger Colliery in Kent in December, 1941. About 4,000 people were idle.
As a result of this strike, and against his advice and that of the Department the Government decided that they must take strong action, by way of prosecuting some of the people. They had to ask the union to agree that only a few should be prosecuted, because they realised that it was impossible to prosecute the whole 4,000. The union was very decent about it. It said, "All right, you can have a few test cases." The secretary and chairman of the local branch were prosecuted and imprisoned. What happened? The workers remained on strike—they were more determined than ever before. What a position!
Ministers of the Crown had to go down and negotiate with the imprisoned men in order to get agreement for the men to return to work. The Minister of Mines had to consult the Home Secretary to find a way of getting the men out of prison. If ever there was any prosecution under this; current Measure the same thing would happen. Immediately after the war then; was the mass strike by the dockers, the great campaign against Order 1305. How did they destroy Order 1305? By going on strike. When their leaders were imprisoned they were more determined than ever to carry on with the

strike. It is not as though we have not had experience of what happens when action of this kind is taken.
We have had these provisions in the two previous Bills and until now there has not been a challenge. I thought that we would see a challenge when the Liverpool bus men came out on strike. The Ministry of Labour was either exceedingly clever or hopelessly inept. They asked the local authority to refer the award to the Prices and Incomes Board, but they did not put an Order on it. Therefore, for 13 weeks the Liverpool bus men were on strike, but they were not striking illegally because there was no Order. Had there been an Order and prosecutions, I do not believe that the Liverpool bus men would have been back to work yet, unless the sort of action taken in relation to the coal mines was taken.
9.0 p.m.
I wish to go a little deeper into this matter. Since I was 16 years of age, I have been a member of a trade union and a member of the Labour Party. I have always rejected the theory of elitism. I have always believed that democracy was based on what people wanted from below. There has always been a current of thought in our movement, unfortunately, which has tended to argue— and this was very much the thinking of the Webbs—that certain things had to be introduced that were good for the people, whether they wanted them or not. I remember the old story about the chap, speaking in Hyde Park, who said, "When you get Socialism you will all have a car". Someone said, "I do not want a car", and he said, "You'll have it and like it".
That has never been my concept of Socialism. My concept has been the very opposite. People will create what they want on the basis of their actions and activity and not on what a small group of people, no matter how clever they are, believe is good for them. I have analysed this very interesting theory. It is not a Fascist theory, as I have heard argued by some hon. Members opposite. It is a corporate state theory in the sense of democratic control and the belief that everybody has his rightful place. This is why some of my hon. Friends think that the rightful place of the workers is to have their wages controlled. I am not prepared to accept that argument.
It is true that we are not arguing about putting people in prison—not immediately, anyway. I hope that the Clause will not go through and that people will never be put in prison for this sort of thing. Just imagine the scene. Is there to be distraint on the workers? If we do not stop something out of their wages, will we go to their house and take out their bathroom suite? Will we put all their furniture in the street? I ask my hon. Friends to consider the scene which there would be on one of the working-class estates in Liverpool. First, we should have to train some pretty hefty fellow in order to get the furniture out. But, having got it out on to the street, I can imagine every docker on the estate getting the stuff back in again. There would be a riot. This is absolutely ludicrous. The whole thing is hilarious. It does not work, and it cannot work.
My hon. Friends on the Government Front Bench have boasted about the policy time after time. They have said, "We have not introduced many Orders because the trade unions have voluntarily applied the policy". Of course they have. If they had not done so, it would not have been successful at all.
The trade union movement does not want penal Clauses. It has stated quite clearly that it is prepared to give a go to the voluntary system. To do what? I think George Woodcock said, whenever necessary, to have a shabby compromise and to do the best we can. We will get no more than that. That is what the Government have to do concerning the control of wages and so on. We must do the best we can.
I make one last appeal to my hon. Friends on the Front Bench. Drop this Clause. Do not put us in the position of having constantly to argue and vote against our own party on matters of this kind. If we have to, we have to. But at the last minute I appeal to my hon. Friends to drop it now and do the most sensible thing concerning prices and incomes that can possibly be done.

Mr. Emery: There is little doubt that this Amendment is causing the most searching investigation of conscience that any hon. Member of this House can possibly have.
The hon. Member for Liverpool, Walton (Mr. Heffer) and I do not often agree, but I agree with him when he tells the Government that they cannot, by whatever action they like, control the free action of people, whether members of a trade union or not, when free and collective barganing has been brought about. If the Government believe that they can stop this kind of action they could not be more wrong.
The Government are attempting to ride a tiger, which is uncontrollable. They are trying to give directions to those who have no intention of listening to what the Government wish to propound. This seems to expose more clearly than at any time the complete nonsense forming the basis of the thinking of the Government in this matter.
The hon. Member for Derbyshire, South-East (Mr. Park) talked about the long-drawn-out agony. It certainly has been. Time after time we have heard speeches from different Ministers—they have always differed—year in and year out giving pledges that there is only this bit more, only that bit extra. Indeed, today they are saying that this Bill is all that they need. It is like the geometrical equation that, once started, gets greater and greater. Once we start on the path of controls which the Government are suggesting, there will be no stopping until there is ultimate control. That is why I support the Amendment.
I do not agree with the hon. Member for Walton when he suggests that we just let wages out and not affect prices and dividends. I suggest that if we go that far we have to go further. This Amendment, if carried, makes it apparent that the Government have to rethink their policy. This is why I go along with it, although it would leave certain parts of the Bill, which I think are repugnant, perhaps even more repugnant.
I turn now to a number of points in the Amendment which have not been covered. The Amendment is extremely wide. It refers specifically to the control of incomes, but in fact it goes to the heart of the Prices and Incomes Act, 1966. It deals not only with pay and other claims, but with awards and other settlements. This has not been mentioned so far. It deals with all aspects of the standstill, and therefore the Government would be deprived of any power to


institute any form of standstill at any time. That is what the Amendment sets out to do.
It also deals with the terms and conditions of employment, and with enforcement, but certain conditions of employment would still be affected if the matter involved a summary conviction or conviction on indictment. It deals with employment under the Crown, and finally it deals with offences to which this part of the 1966 Act refers.
This is a battle about free and collective bargaining and the hon. Member for Walton was right in asking whether, even for a short period, the Government wish to condemn the results of free and collective bargaining. I shall not represent my party and stand for that. It is clear that this issue transcends party politics in many strange ways, and it is as well that the country should realise that. It is of the greatest importance that the message should go out from this House tonight that we believe that no Government have the right to condemn to imprisonment those who organise trade unions to better the working conditions of their members. [Interruption.] Hon. Gentlemen opposite may not like some of the people who support them, but they should realise that the feelings of others are as deep as their own.
I suggest that hon. Gentlemen should realise that they are not the only sincere people in this House, and that when Members other than themselves make speeches they mean what they say. I think the hon. Member for Poplar (Mr. Mikardo) knows that I do not readily say anything which I am not willing to defend at any time. We ought to make it clear that, irrespective of party, we believe that the concept of free collective bargaining should continue, and that there should not be control by the Government. That is what the Amendment is about.

Mr. Michael Foot: Mr. Speaker, I thank you for having arranged that this Amendment should be called. We greatly appreciate the consideration you gave to our representations.
The hon. Member for Honiton (Mr. Emery) at the beginning of his speech said that the Amendment was so comprehensive that if carried it would wreck the Government's prices and incomes policy. I do not take that view. I agree that

the Amendment is extremely comprehensive, but if the House decided to accept it I do not believe that consequence of that vote would be the wreckage of the Government's prices and incomes policy. In a sense, the Government would be able to start afresh, to rebuild that policy in much better circumstances. I should like to explain, therefore, what would be the consequences of accepting the Amendment.
9.15 p.m.
It would not mean the destruction of all the ideas behind the Statement of Intent agreed about two years ago or of the prices and incomes policy upon which this party was elected at two General Elections or of any plan for having an incomes policy. What it would mean is that the Government would have to revert to a voluntary prices and incomes policy or at any rate a voluntary incomes policy. They would be able to keep the compulsory part dealing with prices and dividends, which I think would be a good thing, but would have to revert to a voluntary policy for incomes.
No hon. Gentleman or hon. Lady on the Front Bench can say that that is an impossible situation, because that is the position which the Prime Minister himself took up during the last General Election. He did not say then that he would have a system of legislative control. Even as recently as the period immediately after devaluation, the Government, and the Prime Minister in particular, were talking in terms of a voluntary incomes policy. The Government themselves say that they wish to return to a voluntary incomes policy as speedily as possible. If they accepted this Amendment, they would get it even more speedily than they had hoped. They will still be able to return to a voluntary policy.
Therefore, the argument of the hon. Member for Honiton does not stand up. I understand the attraction from his point of view, but he must recognise our position. Our position on this Bill—or certainly mine—is that I am in favour of a prices and incomes policy, but a voluntary one, and I believe that the compulsory element will help to wreck the possibility of an effective voluntary policy. That has been the case which many of us have sought time and again


to urge on the Government in circumstances which would have prevented this debate taking place.
It is a most melancholy state of affairs that we should have ever reached a debate on this issue under a Labour Government. It has not been for lack of warning from some hon. Members on this side. We have sought to warn the Government on every conceivable occasion that we could debate this matter and therefore the Government should not be surprised about their present predicament. It is one which they have chosen for themselves, despite all the warnings. Therefore, if their policy has to be, not wrecked, but fundamentally altered by a decision of the House of Commons, it will be their choice that it has been in the House that the matter has had to be settled.
Let me turn to the argument which appears to be the most substantial one which my right hon. Friend the Secretary of State puts on this matter. She may argue, as she has in Committee, that this Amendment raises the whole question of an incomes policy. I have sought to argue that a voluntary policy could perfectly well follow after this Amendment was carried. No one, I believe, can deny that. If it were carried, we would reach the situation which the Government say that they wish to see at a later stage. But my right hon. Friend has argued that the incomes policy for which she now argues depends in present circumstances upon possessing these reserve powers and has gone on to argue the whole incomes policy case on those grounds. She could do so again today. So could we.
I am opposed to the incomes policy as it has operated. The same view is held by a growing number of people throughout the country because it has operated in a grossly unjust way. It has applied primarily to people who are organised in trade unions. The incomes of people outside trade unions are not affected to anything like the same degree, and the reference of the single salary of Mr. Hambro is a prime example of the case that many of us have been making for months.
The hon. Member for Oswestry (Mr. Biffen) has been stressing that many salary

increases are not being referred to the Board. That hon. Gentleman has raised this matter on numerous occasions and has asked when the Government intend to take action to deal with the salaries of lots of people who have had increases which have never been reported. This is another reason why I regard the policy as it has operated as unjust.

Mr. James Turn: Would my hon. Friend agree that this disadvantage, if that is what it is, would also apply under a voluntary system? Since he would welcome a voluntary prices and incomes policy—and he has stressed the voluntary aspect of it—does he intend to support Amendments standing in the names of hon. Gentlemen opposite which would modify the policy affecting prices, rents and dividends?

Mr. Foot: One step at a time. As for measures affecting rents and prices, I am in favour of the Government having powers to deal with them and I have no objection to those powers being strengthened. But that is another question and there is a great difference between Government intervention to deal with price levels and rents—these have been long-standing matters dealt with by former Governments—and Government intervention in collective bargaining, in the dealings of trade unions, backed by sanctions of a penal nature. This is an entirely different state of affairs. If my hon. Friend fears that this might be carried further—to the powers dealing with rents and prices—he need have no fear because when we come to discuss those matters later he can vote accordingly. Meanwhile, he can vote for this Amendment and raise his voice to sustain those later parts of the Bill, as many of us will be eager to do.
My right hon. Friend's other defence of the step she is taking is that she is in a dilemma. Partly, she argues, these reserve powers are essential for the maintenance of the Bill, but when my hon. Friends follow the argument through and question—as they did in Committee and in previous debates on this subject—the consequences of the reserve powers being brought into operation, my right hon. Friend says that they are being alarmist. She says that we are raising fears that may never arise. I agree that they may


never arise, but it should be remembered that in Committee she said:
My hon. Friend said that the powers had not been used, and the Government could not use them. I would say to him that the reason the powers have not been used is that when it comes to it, the vast majority of the people of this country, and certainly the vast majority of trade unionists are law abiding. The penal powers have not been used because no one has struck against the standstill. They have not struck against the standstill for reasons that I have given, that when it comes to it, it is a very serious decision indeed for anyone to have to make, that he will deliberately defy legislation which has been enacted by Parliament."—[OFFICIAL REPORT, Standing Committee F, 29th May, 1968; c. 156.]
That is a tautological argument. It is saying that people will not defy the law because they do not like doing so. That is true. Once a law has been passed, people do not like defying it, but we must decide whether the law is just, is right or is unjust. We must also decide whether it is likely to be defied. My right hon. Friend can say that so far, on experience—because it has not been defied—one can say, arguing the position backwards, that the elements of justice in it can be proved and that that is why people have accepted it. I can understand her argument, but I do not think she should carry it that far.
Industrial disputes have a way of blowing up in places where they are least expected. I doubt whether my right hon. Friend would have expected that the Report stage of this Bill would be before the House at a time when the major industrial dispute was on the railways. At one time my right hon. Friend made great play of the fact that the Government's incomes policy was supported by the N.U.R. Many of us warned a predecessor of hers that he should not count too much on that vote in support of the general policy, because when it came down to particulars he might find that the union was opposed to it. I warn the Government that they cannot be certain how the possibilities of the application of penal sanctions are likely to occur.
They could occur in a case that they may not have foreseen. The right hon. Lady may say that the Government have to give the Order and the Attorney-General has to agree to the prosecutions, and therefore these afford some protec-

tion. The Government may get into a position where they are forced from one stance to another, and eventually have to resort to the sanctions in the Bill. Once they are forced into such a situation, all the circumstances described by my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) will emerge, and the Labour Government would be faced with a hopeless situation in which they would either have to proceed with the prosecutions, with all the hilarious, but tragic, consequences described by my hon. Friend, or they would have to retreat.
The very fact of having to retreat in those circumstances would be more serious than having to retreat now. This is what some of us have tried to warn the Government about for months. We have said, and no one can deny it, that we are heading for very serious troubles. We have evidence all around us. I do not say that the cause of these troubles is the prices and incomes legislation, although I believe that the situation has been considerably aggravated by the rigidity of the legislation and will become more so. The Government are facing several months of very serious industrial disturbance, and we are debating this question at a moment of very serious industrial trouble. No Government can prophesy how fax that will proceed, or when they will have to invoke the powers which they say are so essential for the maintenance of this legislation. We are trying to rescue them before they get any deeper into this trouble. We are asking why do they not revert to the policy which they were saying was the better policy a few months ago, and which they prophesied would be a better policy a few years hence?
Why is there something so critical about this moment in our affairs that we must have this special form of legislation? Or why is there something so critical in the affairs of this country, as compared with other countries, that we have to have a form of penal legislation dealing with the trade unions which exists in practically no other country? Why are our circumstances so unique? Is it because in the Letter of Intent sent to our international creditors, it was agreed by the previous Chancellor that some form of prices and incomes legislation


would be introduced, and the Government now have this albatross round their neck?
The Government must explain to us, as they have not explained before, why it is so essential at this time to have legislation of such a rare character, which the Government abhorred a few months ago, and which they will abhor in a few months' time. Now they say that we must have it, otherwise the whole economy of the country will be wrecked. I do not believe that. If the House were to throw out this part of the Measure tonight, the Government would have to revert to the voluntary incomes policy and it would do a great deal of good to the House. The authority of the House would be greatly enhanced; our international creditors, and I give them credit when I can, would be able to understand the situation, and the protest which had brought about this changed state of affairs.
What would be best of all would be for the Government to say that they would give the voluntary system another chance, that they would remove this threat and revert to the voluntary system. Above all, I believe that it would be in the interests of the Government. A Labour Government can survive only if it sustains its links with the trade union movement. No member of the Government can doubt that the relations between the Labour Party and the trade union movement of this country have been more deeply strained in recent months than in generations past.
The Government should be seeking to repair those relations. If they were prepared to revert again to the voluntary system I believe that they would make a start in repairing those relations, they would get better results from the point of view of the economy and they would get all the productivity agreements which my right hon. Friend talks about and more. I believe that the Government could begin to regain an upsurge of popular support. This country can be governed only with the popular support of the people, it can be governed only with the willing co-operation of the trade union movement, it can be governed only by persuasion; it cannot be done by force. So I hope that the Government will think before it is too late.

9.30 p.m.

Mr. Gower: The hon. Member for Liverpool, Walton (Mr. Heffer) in his early remarks expressed his anxiety at the possibility of a Government from this side of the House introducing some form of trade union legislation. It is true that at different times we on this side have put forward our ideas on that basis, but at no time have we ever contemplated introducing legislation such as we are now discussing, and at no time have we ever thought of putting on the Statute Book legislation which would so basically prejudice the democratic rights of the parties in industry as this Bill does.
The hon. Member for Walton went on to utter a strange invitation to us on this side to support him and his colleagues in the Lobbies. He hoped that he would have our support, and that was an unusual request to come from below the Gangway. I hope that he will have the support of all hon. Members on this side, not because we wish to embarrass the Government—we have ample opportunities for doing that—but because we feel that the implementation of the Bill in its present form would be prejudicial not only to the future relationship of the parties in industry but to the welfare of our industry and our economy. Like the hon. Gentleman the Member for Ebbw Vale (Mr. Michael Foot), I appeal to the Government to have further talks about this. We go further than did the hon. Member for Ebbw Vale. He, apparently, objects chiefly to penal enforcement. We object to the whole paraphernalia behind it.

Mr. Speaker: We are discussing an Amendment which refers to incomes.

Mr. Gower: The hon. Member for Ebbw Vale objects to the Clauses which are discussed in the Amendment, and the Amendment relates chiefly to enforcement. We share his abhorrence, so we will support the hon. Gentleman who moved the new Clause, we will support the hon. Gentleman the Member for Walton and we will support the hon. Gentleman the Member for Ebbw Vale. I hope that the Secretary of State for Employment and Productivity can feel that she has what is perhaps a very last-minute chance to alter this legislation. By accepting this new Clause she can at


least remove one of the most obnoxious aspects of it.

Mr. Raphael Tuck: I have the misfortune to disagree with what has been said by my hon. Friend the Member for Derbyshire, South-East (Mr. Park) and many others of my hon. Friends for whom I have the greatest regard. I do it with deep regret.
My hon. Friend the Member for Derbyshire, South-East would have us believe that the Government should change their policy and that, if they do not, the trade unions will make it very hot for them. However, a Government who based their decisions not on their Tightness or wrongness but on the effect which they might have on a section of the community and the actions of that section, would be in for a very bad time, and I would hesitate to give my support to such a Government.
This is not a question of whether or not collective bargaining is desirable, which is what my hon. Friend would have us believe. We have reached a point where it is vitally necessary that the increase in incomes should not outstrip the increase in productivity—

Mr. Mikardo: The lawyers as well?

Mr. Raphael Tuck: The lawyers as well. It is vitally necessary that we control both ends of the economy, not only incomes, but prices and dividends as well. I hope that my right hon. Friend will remember that.

Mr. Mikardo: I agree that there ought to be a balance between both ends of the economy, but has my hon. Friend caught up with the fact which came out in Committee that applications for dividends above the norm are dealt with in 72 hours, whereas applications for wages above the norm can hang about for 14 months? Does he think that that is dealing with both ends of the economy?

Mr. Raphael Tuck: I would not go so far as to say that every Clause of the Bill is a model of perfection, but I feel that this Bill is dealing with both sections of the economy. The penal powers can only cause one year's delay, in any case.
I was grateful to my hon. Friend the Member for Ebbw Vale (Mr. Foot) for making my point for me, because I was about to mention the chairman of

Hambros Bank. Without statutory powers covering all claims and awards, those undergoing trade union vetting will be restrained, but there will be no control of those outside organised labour. I am grateful to my hon. Friend for making that point for me.

Mr. Paget: Where does my hon. Friend think the £4,000 that is not paid to Mr. Hambro will go?

Mr. Raphael Tuck: It is not a question of where the £4,000 goes. It is a matter of the principle of the whole Bill.
My hon. Friend the Member for Derbyshire, South-East says that all this should be left to voluntary action, but suppose that voluntary action does not work? Then, my hon. Friends say, so much the worse. What happens then is that the whole economic policy of the Government is frustrated. The increase in wages outstrips the increase in productivity. Inflation follows. The balance of payments position worsens. The country faces economic collapse. I ask if the Government ought to risk that.

Mr. Arthur Lewis: My hon. Friend the Member for Poplar (Mr. Mikardo) interjected a point with regard to lawyers. Evidently my hon. Friend agreed that this was right. Is he aware of the fact that I put a Question to the right hon. and learned Gentleman the Attorney-General pointing out that at the Aberfan inquiry £76,000 was paid out over 17 days in legal fees? I would ask my hon. Friend to whom that sum was paid?

Mr. Raphael Tuck: I am sorry I am not in a position to tell my hon. Friend that. It is a matter for my right hon. and learned Friend the Attorney-General, not for me. But the principle of this Bill remains. I should love to see a voluntary incomes policy. I should love to see a voluntary Income Tax policy. But it will not work; and if it does not work it is necessary that there should be measures for the Government to take, no matter how unpleasant those measures may be. My hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) told us what the Government ought to do, as the trade unions were not convinced. May I, in reply, suggest that he and his hon. Friends, instead of denigrating the Government should do their utmost to


convince the trade unions that in the final analysis, not in the short term, it is in their own interests [Interruption.]—

Mr. Mikardo: To go to prison.

Mr. Raphael Tuck: It is not in their own interests to go to prison, just as it is not in my short-term interests that I should go to prison for evading Income Tax. In the long term it is in their interests that this Measure should be passed.
Finally, I want to say a word about the honeyed accents in which my hon. Friends have received support from the Opposition. In my view, this comes ill from Members of a party which passed the Trade Disputes Act, 1926.

Mr. Biffen: I would like to make only four comments on this particular Amendment, because I know that a very large number of hon. Members wish to take part in what, for many of them, will be the most significant of the debates we shall be having on this Report stage. I would like to comment first on the contribution of the hon. Member for Ebbw Vale (Mr. Michael Foot), because I believe he very rightly identified what is at the core of this Amendment in its relation to what we are pleased to call a voluntary incomes policy; because the effect of this Amendment, by eliminating Sections from Part II of the Prices and Incomes Act, 1966, effectively destroys the whole of Part II of that Act, inasmuch as it relates to incomes. It is quite important that we should understand that the hon. Gentleman believes that to be a voluntary policy, because I suspect we have been conditioned by the Acts of 1967 and 1968 to suppose that a fallback to the 1966 Act would be a return to a voluntary policy. The hon. Gentleman knows that that would be a deceit on the part of his own Front Bench and he fears that it is exactly the kind of deceit they may have in mind. I am certain that that lies behind a great deal of the very pertinent reasoning with which he addressed himself to this Amendment.
Secondly, I would like to comment on what would be the consequences if this Amendment, which I welcome, were passed. It would effectively de-fuse the

incomes part of the prices and incomes policy. It would permit us to return to a situation of Ministerial weekend exhortation, except I suspect that with the right hon. Lady it would be weekend Ministerial admonition—vinegar this weekend for Mr. Hambro, chastisement the following weekend for the National Union of Railwaymen, and so on; a series of Ministerial weekend exhortations.
Although I find that a nonsensical proposition, and we have far too much Ministerial exhortation, that is better than the system of penal powers contained in Part II of the 1966 Act which are being sustained by the Bill we now have before us.
9.45 p.m.
My third point concerns the whole question of the industrial relations and what is very generally called industrial discipline. This is not the first time that the House has addressed itself to the whole philosophy of what is contained in Part II of the 1966 Act. I quote from the speech made by Mr. Cousins during the proceedings in Committee on the 1966 Bill. Referring to the Part II provisions which the Amendment seeks to delete, Mr. Cousins said:
This proposal, however, is more rigid than anything there is anywhere else in the world outside the totalitarian societies. I do not easily reconcile the idea that we have probably the most advanced trade union movement in the world and yet the most restrictive Governmental edict as to what it can or cannot do.
The question to which the Secretary of State must address herself is whether she concurs with that judgment of Mr. Cousins. If she does not, she must tell us what has happened in the two years since that speech was made which makes her wish to persist in a policy which she knows is acutely embarrassing to the Government and which could well lead to a House of Commons event tonight, in the sense that the Government majority could be in jeopardy, for there must be some tangible reasons which have not been revealed to the House as to why the Government are determined to persist in this policy.
Surely the implication of Part II, as the hon. Member for Liverpool, Walton (Mr. Heffer) rightly said, is that it undermines conventional and, in many cases, the most responsible of trade union authority. In a sense, it is the potential Trotskyite charter, the potential charter for


any troublemaker who wants to take advantage of the martyrdom that could be implicit in this kind of legislation.
My fourth point is that the Amendment rightly challenges the whole philosophy that it is the Government who know what is the right wage to be paid and when it shall be paid. The Amendment challenges the whole philosophy of economic interventionism. The hon. Member for Walton was right to draw attention to the clash which is implicit in this between the traditional trade union support within the Labour Party and what he was pleased to call élitism.
I hope that the right hon. Lady will not think that I am seeking to become an unofficial paid-up member of the Transport and General Workers' Union if I again quote something that Mr. Cousins said during the Committee proceedings on the 1966 Bill and which I believe to be profoundly true:
I have said that we must have a method of ensuring that there is a growth of the economy and an improvement in the standard of living. The place to get this is not in Parliament. One cannot do this in Parliament. The complex problems of industrial relations and understanding between the two sides of industry cannot be solved unless one is working in industry."—[OFFICIAL REPORT, Standing Committee B; 2nd August, 1966, c. 267–68.]
Is it not time that there was some blinding flash of humility about this place and a realisation of just what are the functions that Parliament can reasonably discharge and what functions it cannot? Is there not a realisation that, the Government having persisted with their policy as exemplified by the Part II provisions, we have not seen any of the advantages it was supposed to have brought about? Industrial unrest is rife. None of the supposed economic advantages which were to flow from the policy are yet tangible. I do not want to widen the debate by mentioning all the things which were supposed to be avoided by the policy but which have inevitably followed as a result of it. The hon. Member for Derbyshire, South-East (Mr. Park) has, consciously or otherwise, cast himself in the rôle this evening of an economic freedom-fighter. He said that he was prepared to go into the Lobby in defence of that faith. I shall be delighted to join him there.

Mr. Ted Fletcher: On this Amendment we are considering

whether we can force through the House legislation which is opposed by 9 million organised trade unionists, and whether, if this Measure goes through, it can be effective in face of the hostility of the organised trade union movement.
There is no doubt that the Government are relying upon experience with the 1966 and 1967 Acts, but on those occasions the T.U.C. said that it reluctantly agreed to co-operate with the Government. On this occasion, however, the organised trade union movement has said in emphatic terms that it is not prepared to co-operate in the operation of a prices and incomes Measure such as this.
A few weeks ago there was a meeting at Croydon of the national executives of all the trade unions affiliated to the T.U.C. There were only two propositions before the conference, one that the T.U.C. was prepared to recommend voluntary cooperation with the Government, the other an amendment which was hostile in every sense to co-operation with the Government. There was no motion enthusiastically supporting the provisions of this Prices and Incomes Bill.
Every trade union conference which has met since the White Paper—the shop-workers, the clerical workers, the amalgamated engineers, the draftsmen and many others—has roundly condemned the penal clauses in this Bill. The latest came only a few days ago when N.A.L.G.O., the organisation of local government officers, which no one could accuse of having revolutionary tendencies, unanimously rejected the penal clauses.
My hon. Friend the Member for Derbyshire, South-East (Mr. Park) instanced what happened in the electricity supply industry in Ireland, but he did not tell the end of the story. After the men had been arrested and the electricity board sent representatives down to pay their fines in order to free them from prison, they said, "We do not want to go now. It is midnight, and we have no means of travelling home. We intend to stop in prison for another night". The electricity authorities said, "For God's sake, you must go back. You must be at the power plant in the morning". So the electricity board paid for a fleet of taxis to take the workers from prison.
During the war, we had many instances, Regulation 1305 and so forth, in which the policy of compulsion failed. My


right hon. and hon. Friends on the Front Bench learn nothing from history. All they learn is to learn nothing from history. If organised trade unionists say that they will not be compelled by penal legislation, they will not be compelled, and the law is held in disrepute.
I raised this matter in Committee with my right hon. Friend, and she replied that my fears were groundless. She said that it was not the Government's intention to send anyone to prison and that people would have great difficulty in getting into prison because of the Criminal Justice Act. Apparently, it is quite a job to get into prison nowadays. All that would happen would be that people would have to pay the fine. If they had not the money, they would have their goods sold, the bailiffs would be called in, and so on, but they would not be sent to prison. She said that this has not happened in the past and will not happen in the future. But if it is not the Government's intention to send people to prison, why do they include the provision in the Bill? Are they asking for a provision they do not intend to use? If it is their firm intention not to send trade unionists to prison, there is no need for any reference to penal sanctions in the Bill.
Therefore, the position is that we are faced with hostility from the organised trade union movement, and we cannot get an effective prices and incomes policy without its co-operation. I know that there are all sorts of economic arguments that it is necessary to force a prices and incomes policy through, but we must ask whether the policy is politically feasible. It is not, when the people the Government are asking to co-operate with them are refusing to do so.
I have listened very intently to the contributions by hon. Members opposite. We simply cannot believe the newfound enthusiasm of the Conservative Party as the standard bearers of trade unionism. We know their history, right from the Combination Acts to the Osborne and Taff Vale judgments and the 1927 Trade Disputes and Trade Unions Act. We have read their pamphlets about what they will do when they return to power.
It may well be true that the Government are trying to handcuff the trade

union movement, but if hon. Members opposite return to power it will have a rope around its neck before it can say "knife", and the trade unionists know this. Whatever the trade unionists might think about the Labour Government— and there is a good deal of resentment about the Government's attitude towards them—they will always have an allegiance to the Labour movement and the Labour Government, because they fear what will happen to them if hon. Members opposite ever return to power.
Therefore, I am not asking hon. Members opposite to come into the Lobby with me when I support the Amendment. I do not care a damn what they do. If they like to come in, that is up to them. But this is an Amendment submitted by people who have the true interests of the trade union movement and the Labour Government at heart. We profoundly believe that our Government, who have done many admirable things, are making a mistake over the penal Clauses. Even at this late hour, will not they think again about this headlong confrontation with the trade union movement? It will destroy our Labour movement if it is permitted to happen. Therefore, even at this eleventh hour I appeal to my right hon. Friend to think again and let us go forward with a prices and incomes policy acceptable to those whom it will most concern.

Mr. Peter Hordern: I intervene only briefly to ask the Minister one question, because I observe that the Financial Secretary to the Treasury is present. The hon. Member for Ebbw Vale (Mr. Michael Foot) raised a very interesting point when he said the Letter of Intent referred to the prices and incomes policy which was to be introduced by the Government. Can the right hon. Lady give a clear assurance, before the House considers its attitude to the Amendment, that there was no pledge that there would be a compulsory statutory prices and incomes policy in order to gain a loan from the International Monetary Fund or any similar body?

Mr. Kenneth Lomas: My hon. Friend the Member for Darlington (Mr. Ted Fletcher) made the point that he could not give a damn what the Opposition did tonight. Of course he could give a damn, because


this is why some of my hon. Friends have put down the Amendment. They want to defeat the Government and therefore they want Tory support. [Interruption.] They have my support when I think that Government policy is wrong.

Mr. Mikardo: What about prescription charges?

Mr. Lomas: That was a completely different issue.

It being Ten o'clock, the debate stood adjourned.

Ordered,

That the Proceedings on the Prices and Incomes Bill may be entered upon and proceeded with at this day's Sitting at any hour, though opposed.—[Mr. Ioan L. Evans.]

Question again proposed, That the Amendment be made.

Mr. Lomas: The objective of the prices and incomes policy is to protect the lower-paid worker. [Interruption.]

Mr. Speaker: Order. The House wants to hear both sides of the question.

Mr. Lomas: It is also to try and control the mavericks who exist in unions as much as in big business. No one from either side of the House has yet told me how it is possible to control people who are not prepared to accept the T.U.C.'s voluntary policy. That is the crucial issue.
The Government have not used the power it was given to imprison trade unionists since the 1966 Act was passed. I remember the speeches made at Labour Party Conferences and elsewhere at the time about how trade unionists would rot in jail and the rest of it. But it has not happened because, with the reserve powers in the Act, the majority, indeed all the trade unions, have seen the light. They have seen that they cannot go beyond that which is fair and proper.
If we did not have these provisions in the Bill certain trade unions—and my hon. Friends know to which I refer— because they are in a militant position and are strong, because they can bring the economy down, could hold the nation to ransom. They could get ahead while those at the bottom end of the scale would suffer.

Mr. Peter M. Jackson: Do my hon. Friend's remarks

refer to the National Union of Agricultural Workers?

Mr. Speaker: Order. Will the hon. Gentleman address the Chair? Then the Press can hear.

Mr. Jackson: Would my hon. Friend apply his remarks to the National Union of Agricultural Workers? He has spoken of certain militant trade unions, I draw his attention to Part II of Schedule 2, which gives the Government power to restrict the orders of agricultural wages boards. I had not previously understood that members of the N.U.A.W. were regarded as militant or that they could hold the nation to ransom.

Mr Speaker: Order. I apologise for the word "Press". I meant the Parliamentary Press, the Parliamentary Reporters.

Mr. Lomas: I thought for a moment I was back on the Countryside Bill. Of course one can include agricultural workers among the lower paid. The objective of the Government's policy is to ensure that those at the bottom of the scale are lifted up. This is what my union, the National Union of Public Employees, has recognised. It realised the value of the Prices and Incomes Board as far as the ancillary workers in the health services are concerned.
Surely the Government and the nation are trying to level up, to even out the differences. We are trying to ensure that those who are strong and militant should not merely use their power in their own interests. That is what these provisions are about. They are to try and restrain people who are in a position of strength and who will use their militancy to take that to which we do not think they are entitled while others are left at the bottom.
Unless we have these Clauses, and I address myself to my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) and any other hon. Members who think in that way, how on earth are we to control people who are not prepared to play the game according to the voluntary system? We have to have these provisions, written into the Bill, as a longstop. The Government have no intention of implementing these Clauses if the trade unions will work the voluntary


system. We want them to do this, we have asked them, appealed to them to do so. Provided this voluntary system can be worked out between themselves, and provided that they will accept the decision of any T.U.C. vetting committee that might be set up, there is no reason why the Government should intervene at all.
If there is a union which deliberately sets about violating the regulations or the decisons of the vetting committee, it follows that the Government must have the reserve powers to stop this happening, to stop people breaking through when they are not entitled to do so. This is why we want these Clauses in the Bill. I ask my hon. Friends to be very careful indeed when they are applauded by the party opposite. I do not believe in the synthetic support for the trade union movement from the benches opposite. If hon. Members on this side of the House are to divide tonight, they should not think that they have struck a blow for Socialism by taking that rump apposite into the Lobby. I would seriously ask them to consider what the alternative to this policy is.
What is the real way in which we can make the Measure effective? Unless and until we get the economy right, and unless and until we ensure that the lower paid worker is cared for, looked after, and ensure that people are not allowed to break through, we will get nowhere. I know that there is a hard core on this side of the House which will divide tonight, but there are some who should think again before going into the Lobby against the Government and who should bear in mind the benefits conferred upon the working people by this Labour Government in the past 3½ years before enlisting the support of the Tory Party, in their effort to bring down the Government tonight.

Mr. J. J. Mendelson: I want to address myself to my right hon. Friend who is responsible for this legislation and who represents the Cabinet in this debate. Like other hon. Members I am fully conscious of the fact that she has inherited this policy. I do not say that she has not got her own good reason for supporting it, otherwise I am certain that she would not try to pilot it through the House. The historical fact is that she has

inherited the legislation, and there are other senior members of the Cabinet responsible for its introduction.
I begin with a simple point concerning the policy put forward by the two major parties at the last two General Elections. The party opposite has for some years put forward, sometimes rather half-heartedly, and sometimes a little more brazenly, a policy which includes a legal framework to enshrine the trade union movement and its major action. The party opposite is on record as wishing to isolate the trade union movement, and it has no case to make for a free trade union.—[HON. MEMBERS: "Rubbish."]— I do not mind hon. Members shouting "Rubbish", particularly those who know very little about the subject, especially the policy of their own party. I notice that those who have taken part in working out the policy are not saying "Rubbish." I have made my point.

Mr. R. Carr: Would the hon. Gentleman tell the House, in view of what he has said, whether he regards the trade unions in Sweden, Germany or the United States as not being free, because they operate under a system of civil law, which is very different from the law that the Government are talking about?

Mr. Mendelson: If I were to engage now in a dissertation about trade unions in those countries I would be out of order and would not fulfil the purpose of my speech. I say to the right hon. Gentleman and to those who worked out this policy that they are intending to introduce a legal framework of compulsion to frustrate and control the main functions of the trade unions, and, when we fight the next round on this subject, we shall see how their proposals have been received by the trade union movement.
In contrast to the Conservative Parly, the Labour Party and all the members of the Cabinet, in the 1966 and 1964 elections, put no proposals containing penal clauses and sanctions before the electorate. That cannot be controverted by any of my colleagues who fought on the same platform on which I fought those two elections. Moreover, the substance of this Clause was the subject of many questions put to us as Parliamentary candidates. There are many Press reports from the Sheffield area, for instance, where trade unionists put this


very point to me, and I was able to reply on the basis of our policy as put forward jointly by the Cabinet and the National Executive Committee that such clauses and such intentions were not part of our policy.
It is, therefore, clear that what we are debating on this important Amendment is an issue which goes to the heart of our policy and principles. The introduction, without any mandate from the electorate, never mind only the trade union movement, although it is most directly concerned, of a Clause which, for the first time in over 60 years, seeks to put the criminal law on trade unionists and trade union officers who are following their normal industrial course is something which a Labour Government must not do.
I turn to the case, as far as I know it, made in the last few weeks by my right hon. Friend, because obviously, when she replies to this debate, there will be an easy opportunity to refer to her policy. On the other hand, I am convinced that unless one follows my right hon. Friend and her Cabinet colleagues on their own ground one will not have done justice to the importance of this debate.
My right hon. Friend needs no lecturing from me or from any other hon. Member about the important economic consequences involved in this matter. She knows as well as many of us that if, in this period of economic recovery which we are beginning to enter—[HON. MEMBERS: "Oh."]—I realise that hon. Members opposite do not know much about this, but my right hon. Friend does. There is, for instance, the fact, which is of great importance to trade unionists in my area, that production in the steel industry has gone up from 74 per cent. to 85 per cent. of capacity. We are making similar advances in other industries. Hon. Members opposite who are interrupting me and opposing that point of view are gloating, as usual, in the hope that we shall not make an economic recovery. That is their normal attitude and policy. It does not surprise anyone on this side of the House.
10.15 p.m.
My right hon. Friend the First Secretary knows very well that if we have a summer and autumn in which there is

great dissension in the trade union movement and in industry, in which, ipso facto, the Government by virtue of this Clause will have to make the final decision about whether penal sanctions will be invoked—the employers will not be in a position to do that; this is a right exclusively reserved to the Government— then, instead of concentrating on productivity agreements and on advancing our economic policies, we shall be involved in countless quarrels and disagreements which will endanger our economic advance.
The reason the Government are tying themselves to these sanctions is very straightforward. Over the last few years many senior members of the Government —in my opinion wrongly, but it is a matter of fact—have been exaggerating the importance of an incomes policy in their discussions and negotiations with bankers abroad, with members of the International Monetary Fund, with the Secretary of the Treasury of the United States, and with other Governments. Many senior members of the Government —and we must pay attention to this dilemma, otherwise we would not be doing justice to the debate—feel that they are committed to a continuation of this policy, including the penal Clauses to retain the Government's credibility internationally in the economic and political sphere in the eyes of those with whom they have entered into many engagements.
That is why, Mr. Speaker, with your approval, some of my hon. Friends and I made several attempts to move for an emergency debate on the Letter of Intent. I am not saying that the Letter of Intent contained a sentence saying that on such and such a day we commit ourselves to introduce a Bill containing a Clause which is punitive in its intent. Of course not. But the understandings that have gone on for several years now make the Government feel that if they were to say, "We will abandon part of this policy", their credibility would be seriously affected. They, therefore, feel that they have no room in which to move.
I hope to some extent that I have fairly stated what is in the minds of many senior Ministers. I believe that they are profoundly mistaken. If, in a democratic country, the trade union movement and its large majority having declared that it


does not wish to support this policy and if, on many occasions, it has been proved that the Government's standing with their most constant supporters, as has been proved in by-election after by-election, is going disastrously downhill, the Government deliberately takes account of these movements of opinion and says to the House of Commons and to the country, "We are taking note of these aspirations and expressions of opinion and we will modify our policy", and makes a stand on a modified policy, this will not be disastrous for the Government's international standing, it will not be disastrous for the Government's credibility, and it will in no way impair the prestige of the Government. But it will do one important thing. It will bring back to the support of the Government many major sections of the trade union movement— [Interruption.]—It is all very well hon. Gentlemen opposite saying "Ah". I know that they are dedicated to the proposition that we should do nothing to bring back the support of the trade union movement to the Government. But I am giving advice to my right hon. Friend, not to the enemies opposite of the trade union movement.
My last point is that there is now a special situation which makes this policy and its enforcement, with the help of the criminal law, even more unacceptable to our supporters and to trade unionists in general.
In Committee my right hon. Friend said:
The whole approach is to increase the standard of living and the share of the good things of life for the working people. Therefore, I point out that the principle is certainly not all on one side in this situation."— [OFFICIAL REPORT, 29th May, 1968; Standing Committee F, c. 146.]
We are now in a position where, on the admission of the Treasury and of people like Mr. George Woodcock and others, there will be, at least in the view of the Government, an increase in the cost of living of 5 per cent. According to Mr. Woodcock, it will be 7 per cent. Some of these increases, on the Government's admission, are completely inevitable.
We are therefore in a situation—and I should like my hon. Friends to pay particular attention to this in view of what has been said during the debate—in

which, after the enactment of the Bill if it is accepted with this penal Clause, we will for the first time in many years have at least a 1 per cent. cut in real wages. It is in that situation that my right hon. Friend proposes to have this Clause included in the Bill. This means that, for the next 12 months at least, this punitive Clause will be one of the reinforcing agents of a policy which is responsible for a cut in real wages. That is what is new compared with the debates of twelve months and two years ago.
I remind my right hon. Friend of the position of railwaymen, many of whom are in the Penistone area. They were the first to suffer under the standstill in July, 1966, when they had a 3½ per cent. claim in. They are the workers who are always lagging behind, and under this legislation if a group of trade unionists get together and try to persuade their employers, or try to put some pressure on them to grant an increase, they will be acting illegally.
It is on those grounds that I urge the Government to take note of what is being said in the trade union movement outside, to take note of what is being said by a large section of the electorate, and to take note of what is being said by hon. Members in this House who, like my right hon. Friend, have the future of the movement at heart, and not to insist in going on with this Clause.

Mr. James Hamilton: It was not my intention to take part in this debate, but after listening to some of my hon. Friends, I felt, as an active trade unionist, that the trade unionists' point of view had to be put, and put clearly.
As one who attended the Croydon Conference and participated in the discussions, and was there when we arrived at a conclusion—and the trade union movement, as it went on record, took a decision that it would agree to a voluntary policy —I can tell the House that on every occasion without exception virtually every trade union has agreed to accept a voluntary policy.
I should like my right hon. Friend to tell the House whether she dissociates herself from the policy of the Government. I do not think that it is good enough that some of my hon. Friends should be making the point that the Minister responsible for presenting this


policy to the House should not be in favour of that policy, and I hope that when my right hon. Friend replies to the debate she will make this very clear to each and every one of us.
I am a member of one of the most militant trade unions affiliated to Congress.—[Interruption.]

Mr. Speaker: Order. The hon. Member is addressing the House.

Mr. Hamilton: We bend the knee to no union in the movement when it comes to the question of wages. Nevertheless, over the years we have realised that the lower paid workers had fared badly under any policy put forward in respect of wages. Perhaps I might give the House an example of something which happened only last Monday involving my own trade union. We negotiated with the employers in Grangemouth. At the end of the negotiations we came out with a productivity agreement which gave our members on the Grangemouth site an increase in wages of close on £9 per week, provided there was the necessary increase in productivity.
My members, in the main, construct power stations, which of course are paid for by the taxpayers of this country. They realised that many of the lads who are responsible for the fabrication of the materials used in the construction of these power stations are lucky if they go home with £13 a week, whereas in many cases the lads responsible for the erection work make as much as £50 a week. The money is coming from one cake, but the difficulty is that some of the lads are receiving a very small portion of the cake, while others are receiving a mammoth share of it. This, of course, is grossly unfair.
Much has rightly been said about the penal Clause. I have never believed that any such Clause should be in the Bill. I said so at the Parliamentary Labour Party meeting, I have said it at virtually every trade union meeting upstairs and at trade union conferences. Why, oh why? the Government have it I cannot understand. This has been in operation since 1966 and on no occasion have the Government had to resort to the penal Clause.
I have implicit faith in the trade union movement. Trade unionists are accepting

the prices and incomes policy, providing that it is equally applied to everyone. But the Government tell us that if there is any difference of opinion about dividends, the matter will be solved within 72 hours. But it is a different matter for wages. The Federation of Engineering Unions put in a wage application on which negotiations have been going on for ten months. It took a day's token stoppage by the engineering unions to bring the employers to their senses, and negotiations have now been reopened. By the time that they are concluded, 14 or 15 months will have elapsed. Thus, dividends disputes can be settled in 72 hours but wages disputes cannot be settled in 14 or 15 months. This is why the trade union movement is justifiably dissatisfied.
Under no circumstances do the Government intend to invoke the penal Clause, because they know that, if they tried to do so with one union, the whole of the trade union movement, without exception, would align itself with that union and there would be a strike similar to that in 1926. Therefore, I plead with the Government to measure up to the points of view put so forcibly by many of us on this side, who cannot, under any circumstances, in our hearts accept the penal Clause.
I advise my hon. Friends, however, that, if they are prepared to divide the House, and if the Opposition follow them, as there seems no doubt they will, and if by some strange circumstances the Government should be defeated, I have no hesitation in saying that the whole trade union movement will condemn them for ever for bringing to their knees a Government dedicated to carrying out a Socialist policy, a Government who will, given the chance, carry out the policy upon which we were elected, a Government who will, of course, carry out an incomes policy which will be acceptable to all of us. I am asking my hon. Friends, if they are genuinely behind the Government, to refrain from voting this evening, because, if they align themselves with the Tory Party, who have never been the friends of the trade union movement, for ever they must hang their heads in shame for having brought this Government, once again, to the floor.

10.30 p.m.

Mr. Peyton: The hon. Member for Bothwell (Mr. James Hamilton) made a remarkable speech. He commanded a good deal of support when he asked why the Government needed to import penal sanctions into the Bill. But just when many of us were beginning to feel that he was right, he turned on his hon. Friends and warned them not to carry their opinions, or his, too far. I assure the hon. Gentleman that to do the same thing as one's political opponents does not mean that one is open to permanent condemnation. There are honourable hon. Members on both sides of the House who deeply value freedom and who are far more concerned, as I have no doubt he is, with the future of this country than with any sectional interest.
Coming from an hon. Member who I know to have the virtues of common-sense and fairness, I found it difficult to swallow his sectional approach, along with the cheap threat which he lodged against his hon. Friends; that if they vote with their convictions they will for ever more have to hang their heads in shame in the company of good trade unionists. In adopting that sentiment the hon. Gentleman did himself less than justice.
I regret that, because I was in some personal difficulty—[Interruption.]—I was not able to be present for the beginning of the speech of the hon. Member for Penistone (Mr. Mendelson), who made it clear that the Government were taking a step which no Labour Government should ever take. If one looks back three or four years, to the time when the sun was rising on Socialist prospects—to the dogmatic statements of the Prime Minister, the right hon. Member for Belper (Mr. George Brown) and others about how a compulsory wages policy was a complete anathema—one recalls that had the suggestion ever been made that a Labour Government would be introducing penal Clauses in such a brutish Measure, anybody making such a suggestion would not even have got a hearing.
The hon. Member for Penistone made it clear that this is something which a Labour Government must not do. As this is a matter of conscience and deep

conviction, one wonders how many hon. Gentlemen opposite will bow to the party whip. And when one considers whether or not the Government are credible— leaving aside the question of the credibility of back bench spokesmen—one must accept that the credibility of the Government Front Bench is very low sunk.
Although I do not share the Minister's convictions, she does not lack courage. She has the most extraordinary ability to battle through, carrying with her an almost impossible case, along with the odium of responsibility for having pushed down the throats of hon. Gentlemen opposite a policy which must be an anathema to them all. But while I pay tribute to her ability, even her eloquence and ability are not sufficient to explain to the opponents of this policy, and even to those who are prepared to go along with her, how this policy will work.
If penal clauses of this kind are put into the Statute Book, it must mean that there is a real possibility of enforcing them, and yet which one of us believes that this Government would be prepared to prosecute trade union leaders? As the hon. Member for Bothwell said, why do the Government need this when they have never used it during the period while this legislation has been in force? The right hon. Lady, not by one of her storms of eloquence but in simple monosyllabic terms, if she can bring herself to such a thing, must try to explain why the Government need these penal Clauses when they have not yet seen fit to use them; and under what circumstances they would possibly do so.
The hon. Gentleman the Member for Penistone referred to the fact that the workers of this country face a prospect of a minimum of a 1 per cent. cut in real wages. I believe that that is a gross underestimate, and that his estimate was a very modest one.
Many hon. Members on this side of the House will agree with me when I say that we do not accept that it is right or practicable for Governments, no matter how well intentioned, to interfere in the detailed complexities of industrial affairs, and when they do so without the means of making that interference effective a heavy price in national terms will have to


be paid. They will vitiate the atmosphere of industrial relations by causing promises to be broken, which is a dangerous thing to do in the world in which we live. The Government carry a heavy load of responsibility for interfering in a sphere which they can never hope decisively or beneficially to influence. I hope the right hon. Lady will listen, not to my pleas— she is well defended against them—but to what her hon. Friends behind her have said. Although they may doubt the conviction with which I say it, I have no doubts about their sincerity. I know how strongly they feel on this issue. I respect their convictions and believe they are right, and I hope that at this late hour the Government may change its normal habit of obstinacy and yield to common sense and to justice.

Mr. Paget: The hon. Gentleman the Member for Yeovil (Mr. Peyton) prefers his vanity to his cause; I do not propose to follow him; I shall be very short indeed. I cannot support the Government in their policy of attempting to control wages and prices. I regard this as a piece of archaic obscurantism; it is something the Government cannot do.
I will refer shortly to an experience in the middle period of this policy, that of the Emperor Julian in the 4th Century. He summoned a meeting of the chief people of Antioch and ordered them to find a remedy for a prevalent distress of inflation. During three months their deliberations had no effect. At the end of that time, Julian took the matter into his own hands and drew up a list of prices. Inflation continued and the hoarding continued. Julian had another meeting with the Antiochians, which ended in the whole body of his senators, over 200 in number, being ordered into custody.
I do not say to my fellow senators that we are in immediate peril, but I am not prepared to support a proposal that trade union officials shall be gaoled or victimised for doing that which their fellow members have elected them to do, and I shall say so in the Lobby tonight.
The Government of this country and the Persians have one feature in common, and that is a process of surviving by

threatening their supporters with suicide. I may think a good deal about our Prime Minister, but I do not regard him as a suicidal type. If the Government are beaten tonight, I think that it will do Parliament good, because Parliament has been impotent for far too long. I think that it will do the Government good, and I can assure my hon. Friends that the Prime Minister will not resign.

Mr. Orme: I want to deal with a couple of very valid points which have been raised in the course of the debate by my hon. Friend for Huddersfield, West (Mr. Lomas) and my hon. Friend the Member for Bothwell (Mr. James Hamilton), who are not in their places, unfortunately.
My hon. Friend the Member for Both-well is a trade union sponsored hon. Member, and I have a great personal regard for him. He warned those of us on this side who have expressed the intention of dividing the House that the Opposition probably will go into the Division Lobby with us. But why are we in such a situation? That is what we have to ask ourselves. Who introduced punitive legislation against the trade unions which is anathema to the whole trade union movement?
It will not be the trade union movement which will castigate us tomorrow if we take the punitive legislation out of the Bill. That movement will be the first to thank us, and we shall be doing the Government a very great service. We will be removing the abscess from the body, and it has to be cut out.
I have not heard any of my hon. Friends defending the punitive Clauses in the sense of saying how necessary they are and how pleased they are that a Labour Government have introduced them. What my hon. Friends have said is that they do not like them.
This, surely, is the whole crux of the argument about prices and incomes. We have been involved in the argument ever since the Labour Government came into power in 1964. We set off on the basis of a voluntary policy. I remember what my right hon. Friend the Member for Belper (Mr. George Brown) said in the Letter of Intent about his desire to get a voluntary policy. But then we became aware that the Government more and more were making prices and incomes the


central theme of their economic policy. We have gone from one form of legislation to another.
10.45 p.m.
The interesting point about legislation is that when it was first introduced in 1966 we were told that it was to be for a short period. When it was supplemented in 1967, we were told that that was the last time we would see such legislation. In 1968 we see it extended for the longest period since the legislation was introduced. We cannot get any undertaking from the Government that at the end of 18 months they will not introduce further legislation. My right hon. Friend the Home Secretary said that he wants to see no more of it and that he thinks that this is the end. My right hon. Friend the Prime Minister will not give that assurance, though he has been pressed consistently.
Some of us on these benches have tried, as my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) said, to get some agreement on this policy which would take it out of the cockpit of party politics or internal politics within the House and within the Labour Party in particular, but we have not been successful. Those of us who are opposed to penal legislation refrained from voting against last year's Bill because we were almost given an assurance that that would be the last time we would see such legislation. Unfortunately, that was not true.
In all honesty, and out of loyalty to what the trade union movement believes in, the Amendment has been put forward. If the House accepts it, it will not be a disaster for the Labour Government. I have never heard such nonsense. The Labour Government will be left with a voluntary prices and incomes policy which they will have to try to make work. My hon. Friend the Member for Hudders-field, West spoke of having some sanctions against the type of trade unions which would take advantage if sanctions were not available. He was hinting at certain militant unions.

Mr. Mikardo: Airline pilots.

Mr. Orme: I will give a far better example. The people who are at the moment challenging the incomes policy are in one of the unions that voted for it

—the National Union of Railwaymen. If the Minister desired, an order could be made, because of the National Joint Council decision. My hon. Friend the Member for Huddersfield, West went further and said that this is to protect the lower-paid worker against the higher-paid worker and those that would exploit the position. The railwaymen are amongst the lower-paid workers.

Mr. Ron Ledger: Not all of them.

Mr. Orme: A large section of them. I could mention many workers who get much more than railwaymen do. My hon. Friend must explain to the railwaymen that they are not amongst the lower-paid. They are, generally, a lower-paid section. [Interruption.] I would ask my hon. Friend the Member for Leicester, North-East (Mr. Bradley), who is from another railway union, not to interject like that, because I might have to give him a pretty straight answer. I am talking about the National Union of Railwaymen and the question of lower-paid workers and whether it is essential to have penal Clauses to implement agreements.
The provisions in Section 16 have not been implemented. True, we have gone two years without their being implemented, but these clauses have been a constant irritant to the trade union movement ever since they were introduced, and everyone from George Woodcock to the leaders of every major trade union has said so.
The powers have not been used, and it is said that we all desire a voluntary policy to be implemented. There are many views on what a voluntary policy should be, whether we should have one, and whether it is possible to operate it. There are differences of opinion on this side of the House about that. But there is hardly any difference of opinion about the central issue of penal clauses. It is alien to all our traditions and beliefs that a Labour Government should introduce such legislation. It is alien to the British trade union movement. This is one of the issues which take trade unionists' minds away from the aims of which my right hon. Friend talks, growth, productivity and all the other things. But the trade union movement does not feel free to think about those other things


now because it is bound by certain pieces of legislation which could, in some circumstances, be implemented against it.

Mr. Lomas: Will my hon. Friend explain what would be the consequence if a trade union went beyond what had been agreed with the T.U.C. vetting committee or settled in any other voluntary agreement? If it went beyond that, what action would he suggest should be taken in the interests of the people below those militant individuals?

Mr. Orme: The same as there is now.

Mr. Ledger: That is no answer.

Mr. Orme: Just a moment. I am answering my hon. Friend the Member for Huddersfield, West. He asks what action I would take. What action is taken against the many people who are not in trade unions, the many employees in private industry in small firms, solicitors, barristers and the rest? It is impossible to go round chasing 26 million employed people. My hon. Friend knows as well as I do that, if we are to have a successful incomes policy, we must have a redistribution of income, and all the other factors falling into place.
In a mixed economy and the type of society in which we live, it is impossible to implement statutory powers against trade unions. This legislation is directed against trade unions more than against any other sector. In many instances, it operates against the larger unions which are easily identifiable. It operates more particularly against those whom one can loosely call Government employees and people working in the nationalised industries because the Government provide, through taxation, some of the finance.
If my hon. Friend is thinking of the nice little tidy policy which he talks about, I ask him to cast his mind back to what happened before there were such ideas. How much difference will the present policy make? It is estimated that, at the outside, it could have a 1 per cent. or 1½ per cent. effect on the economy. In my opinion, that is absolute nonsense. As Mr. Frank Cousins said on the earlier Bill, when he was a member of the Standing Committee, what is needed is growth in the economy, an expanding economy and a planned

growth of incomes in the sense that incomes really go forward.
A policy of that kind would take away the dissatisfaction which has been expressed by working people throughout the country. That is the way to approach it. It is not possible to put people into a straitjacket in the way my hon. Friend suggests.

Mr. Lomas: I now understand why the Conservative Party will join some of my hon. Friends in the Lobby. They all believe in a free-for-all society.

Mr. Orme: My hon. Friend knows that that is not true. He knows as well as I do that my hon. Friends and I have advocated economic policies far more radical than have been implemented by the Government, policies which hon. Members opposite do not like and will never accept. In present economic circumstances, he knows that what he is asking to be implemented is impossible and will not work. The British trade union movement, of which he is a member, as I am, has overwhelmingly rejected it. The trade unions have not rejected their share in planning, in development, in growth and in a say in industry. I want to see some things far more radical than my hon. Friend would accept take place in the economy, but this is not the place to debate them.
The case we have made tonight is that this policy will never work and that the Government are being side-tracked by allowing this to remain in the Bill. There is no need for the Tories to come into the Lobbies with us. The Government have the opportunity of recognising the validity of our argument and withdrawing the penal Clauses. They know that there is overwhelming demand in the movement for this.
At this eleventh hour this is the way to avert the vote tonight: withdraw the penal clauses, and see how we get on with a voluntary prices and incomes policy.

Mr. R. Carr: The Amendment is in line with Amendments to similar Bills which we have moved in previous years from this side of the House, and moved in Committee to this Bill. In voting for it tonight, we shall therefore be following a long and firmly established line of policy.

Mr. Norman Atkinson: The right hon. Gentleman made a policy statement. Is he now saying that the party opposite supports the policy of restraint on prices and dividends only, excluding wages completely, which is the purpose of the Amendment? The party opposite has never tried to introduce legislation restraining prices and dividends only.

Mr. Carr: If I deal with all those points I shall be going well beyond the Amendment. But I think that I shall not be called to order if I remind the hon. Gentleman, if he needs reminding, that we have consistently voted against this and previous Prices and Incomes Bills in toto. Our position is well known, and has been consistent. We would have none of the Bill, and none of these powers.
All we can talk about at present is the subject of the Amendment, which is powers, particularly penal powers, over incomes. We are absolutely consistent in our attitude to this. It may be said by the Government that if they accepted the Amendment they would be destroying the whole of their prices and incomes policy in effect. Like hon. Members on both sides, I ask them even at this late stage to reconsider that belief. I do not think that it is correct. The hon. Member for Ebbw Vale (Mr. Michael Foot) and my hon. Friend the Member for Oswestry (Mr. Biffen) are two examples of hon. Members who doubt their proposition. There is more chance of getting a successful incomes policy by voluntary means than by statutorily controlled means, and the use of penal sanctions or the threat of their use.
11.0 p.m
We have made absolutely clear our position on incomes policy. We have said we recognise that a Government in modern conditions must have a view on incomes and their movement, and must try to influence that movement. But we have also made absolutely clear, over and over again, that the means of trying to achieve that influence must be voluntary and that we will have nothing to do with statutory control, compulsion and penal sanctions.
We believe that statutory control, and penal sanctions in particular, under-

mines the basic authority and influence of the constitutional union leadership, and that, in 99 cases out of 100, is the most responsible leadership there is to call on. If once one begins to undermine that influence, then one undermines the very hope of responsible voluntary action and of a voluntary incomes policy.
I believe that the Government underestimate the very real danger of compulsion becoming an irreversible process, because compulsion feeds on itself. The whole experience now provided by three years and three Bills is that every time one has to have another Bill the compulsion threatened has to be greater and has to cover a wider field, and so the need for compulsion gets greater, it can become an irreversible process, and it can make a responsible voluntary policy less possible rather than more possible.
One thing which one cannot help noticing—anyone at least who sits through these debates at length on this subject—is that all the substantial arguments used by the Government in favour of their particular type of policy are arguments for it on a permanent and not a temporary basis. The hon. Member for Ebbw Vale drew attention to this when he said that the Government had made clear a year or two ago that they did not want to have this, and they also continually made clear that they did not want or expect to have it in the future.
It is, for some peculiar reason, only at the particular moment at which they are speaking that it is apparently going to be necessary. But as that particular moment moves from the present into the future they still find a need for maintaining compulsion, and so they will go on doing. Therefore, we believe that this House must make a clear and clean break with compulsion and penal sanctions. The Amendment, of course, goes much wider than this question, but the debate has concentrated on penal sanctions and I want to do the same.
In conclusion, I want to repeat our view, which we have held for a long time, that the criminal law ought not to be brought into the field of industrial relations. We say to the Government, even at this late stage, why have these


powers? Why have these penal sanctions?
The right hon. Lady in Standing Committee—and for all I know she will do the same tonight—made a great point of the fact that these sanctions would be applicable only in the most exceptional circumstances. She keeps making the point that the great majority of people will abide by law passed by this House, and will abide by Orders and directions. But there will be exceptional circumstances, and what does one do then?
The right hon. Lady in Standing Committee seemed to go a stage further and to say that even in exceptional cases the chances of these powers being used were very remote. But if they are not going to be used, why have the powers at all? Why bring a penal law into this field of activity if it is never intended to use it? Either in exceptional circumstances the Government intend to use these powers, and will have to do so, or they do not intend to use them, in which case they would be far better off without them.
We do not accept for one moment that the only way to persuade people is by holding a pistol to their heads, and least of all by the discovery at the end of the clay that it is a pistol that has got no shot in it. If there is to be a pistol, 1st it be a real one.
But better by far not to have any pistol at all. Therefore, we urge the Government to think again and to agree to remove these penal powers from the Bill. We do not believe that they will fail in their objective if they do so. On the contrary, we believe that they will increase their chances of success. These powers are wrong. They have not worked and will not work. If they are ever used, they will do enormous damage not only to the prices and incomes policy but to other things far more precious as well.

Mrs. Castle: Having listened with great care and attention to what has been a protracted debate, it is essential for me to get clear first what this legislation does and exactly what it is we are being asked to vote about. On the points of order which were raised with the Chair earlier, demanding a discussion on this and other Amendments, a claim was advanced that some entirely new principle

was being introduced through this Bill and that it would be intolerable for the House not to debate it on Report—the new principle of penal legislation against trade unionists.
Indeed, it was very moving to hear the right hon. Member for Mitcham (Mr. R. Carr) saying—and he has repeated it —how iniquitous it is to take trade unionists to court. That was rather cool coming from the author of "A Fair Deal". It does not lie in his mouth to talk about principle in this matter. But, of course, this is important. I am not just making a play on words or a debating point.

Mr. R. Carr: I am sure that the right hon. Lady wishes to be fair both to me and to my party's proposals. Here we are talking about penal law, the criminal law. There is nothing in our proposals which brings the criminal law anywhere near this field. We refer entirely to civil law.

Mrs. Castle: The right hon. Gentleman knows that the distinction between his recommendations and those of the Donovan Report is that the Report thought that these matters were not appropriate to be taken into court— which is the phrase I used and I stand by it.
The Bill introduces no principle which has not been embodied in the two previous Acts. [Interruption.] I listened with great care to the development of some very difficult arguments and I have had to think through my own position. I hope the House will allow me to express it in my own way. It is not a question of importing penal sanctions into this Bill as a new development. I stress this because, listening to some speeches, one might think that that was so, that somehow we were at a great turning point in the history of trade unions and of industrial relations. If that were so, then I can well imagine the anxiety that many would express about the unknown. But my starting point is that what Clause I does is to renew the powers of the 1966 Act. [AN HON. MEMBER: "Once for all."] The hon. Gentleman is not correct. There has never been a once-for-all pledge given. If he would read the speech of my right hon. Friend last year, he will find that he took very great care to tell the House that there could be


no categoric pledges that these powers would never be renewed.
This renews powers taken in 1966 and debated then, taken in 1967 and debated then, and now being taken again. In other words, we shall continue to operate on the same basis as we have done, with the power of statutory notification and statutory standstill as reserve powers. This is important, because hon. and right hon. Gentlemen opposite have to make up their minds. Is the complaint that we have operated the prices and incomes policy, or is it that we have not? People are asking: "Why take these powers, they are totally irrelevant and have never been used?"

Colonel Sir Tufton Beamish: Address the Chair.

Mrs. Castle: The argument has been that we are breaking the movement in two, and breaking the hearts of people for something which is irrelevant and unnecessary, because it has never been used.

Mr. Deputy Speaker: (Mr. Sydney Irving): Order. I must ask the right hon. Lady to address the Chair.

Mrs. Castle: The complaint of hon. Members is not that we have had a policy that was meaningless, but that we have been operating a policy which trade unionists did not like. The whole burden of my argument is that the reasons why trade unionists are unhappy are very different from those advanced, poignantly, by my hon. Friends. They do not like the prices and incomes legislation, for economic and not deep philosophic reasons. The policy has not, up to now, delivered the economic goods that they would like. This is important.
It means that we have operated a policy, yet we have done it without exercising the penal provisions, and without even having to use the basic statutory powers. It is central to the argument that it has never been necessary to use the power to make an Order requiring a statutory notification of a pay or price increase. Never once. [An HON. MEMBER: "Why do the Government need it then?"] One might as well ask why one needs any statutory power in a law-abiding country, just because it is law abiding. The complaint of my hon.

Friends has not been against the power of statutory notification. This is not a great principle. They want to continue this. There is no question of individual liberty here. They want to continue the power of statutory standstill on prices. There is no great issue of human liberty there. Therefore, I repeat that the objection has not been basically to the statutory power of notification or standstill.

Mr. Biffen: I should like to raise an important point of substance which turns on the point the right hon. Lady is making. Are we to assume that when the Government say that they are working towards a voluntary incomes policy they foresee a situation in which they will still keep in being Sections 13 to 22 of the Prices and Incomes Act, 1966?

11.15 p.m.

Mrs. Castle: It will be better if I do not give way because I am trying to evolve an argument. [HON. MEMBERS: "Answer."] I will come to that part of my speech when I am ready. I am sure that the hon. Gentleman will understand that I am trying to follow through a thread of thought. We have had a debate on a high level, and I have tried to follow through and answer the arguments as logically as I could.
It is of great significance that it has never been necessary to make an Order requiring statutory notification. The matter has been dealt with voluntarily. Yet massive numbers of notifications are taking place. In only three cases out of more than 80 have we had to order employers not to pay an increase while the Board was investigating the matter. In the rest of the cases the standstill has been voluntary. Why has that been so? If there were the sense of outrage that some people have tried to express, I am convinced that it would not have been possible to get this amount of voluntary collaboration. If people had felt that we were doing violence to some vital and key principle, we should not have had this amount of voluntary collaboration.
The reason for that is this. First, the trade union movement and the employers' movements agreed on the initial purposes of the policy. They agreed on what the policy was all about. These are powers to enforce something which was collectively and jointly agreed in


its aims and purposes. In drawing up the Declaration of Intent, they agreed to interfere with the principle of free collective bargaining. This is the historic fact which we must all take on board and from which my hon. Friends, despite the sincerity of their distress about the development of the policy, are running away. I have had to listen to hon. Members opposite and some of my hon. Friends talking about the sacredness of free collective bargaining. But the simple fact is that this policy would not have been launched and we would not have had a single Prices and Incomes Bill if it had not been for the Declaration of Intent, when the two great organised sides of industry said, "Free collective bargaining is not enough in our modern economic conditions".
That is the starting point. Some of my hon. Friends may not have liked some of the developments on the way, but I repeat that we could never have launched a single piece of this legislation if there had not been an agreed and voluntarily accepted starting point.

Mr. R. Carr: The right hon. Lady says that this flows from the Declaration of Intent. Therefore, can she say why, on 6th October, 1966, 18 months or thereabouts after the Declaration of Intent, the Prime Minister promised the country that there would be no further legislative powers after August, 1967?

Mrs. Castle: Yes. The policy has evolved. I am not running away from that. [Interruption.] Certainly. We are dealing with another piece of evolution of it in this Bill. We are dealing with the extension of the powers over prices and dividends. [An HON. MEMBER: "And rents."] Yes, and rents. Certainly the policy has evolved. It has evolved in some directions which my hon. Friends like and in others which they do not like. I repeat: there would have been no legislation at all if it had not been for the agreed starting point.
The reason we have had this massive amount of voluntary acceptance is that the trade unionists recognise that there is all the difference in the world between reserve powers to back up a policy they have voluntarily accepted and penal legislation to undermine and weaken trade unionism.
During the debate, some hon. Members have tried to suggest that the Government

are outlawing the strike weapon. Heavens! That is not my experience in the last few weeks. Anybody who could suggest that we are in a situation in which the trade unionist has been robbed of the strike weapon could not have been keeping abreast of things that have been happening in my sphere. It is not a question of outlawing the strike weapon. It could never be. It is that powers could be used only in very precise and limited circumstances, not where a union is using the strike weapon to press a wage claim in the normal processes of rough and tumble with an employer, but where it is using it with deliberate intent to pressurise an employer into committing an offence. That is a different situation. It is a situation which I believe will never happen and it is a reason why the penal powers have never been used.
If this Amendment were carried, what would be the consequences? As has been pointed out, the powers over incomes would drop and the powers over prices would be retained. That will not stop hon. Gentlemen opposite from voting, despite the illogicality of the position in which they find themselves. They are prepared to surrender their logic in pursuit of the embarrassment of the Government.
My hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) said that this would be a very happy situation, because we would be back to a voluntary policy. He spent a lot of his speech in stressing what he called our dilemma in this situation. I suggest, in all sincerity, that he and his hon. Friends are running away from facing their dilemma because they say, and the hon. Member for Derbyshire, South-East (Mr. Park) repeated, "We favour a voluntary policy". My hon. Friend the Member for Ebbw Vale said, "There is no question of going back to the Statement of Intent." He says that we may have to face the consequences of our policy, or to retreat. I say to him that so may he, because one consequence of the voluntary policy is that it is an interference with free collective bargaining and that is why large sections of the trade union movement are opposed to it.
There was a man at the A.E.F. Conference only the other day who supported a motion throwing out of the window the T.U.C. policy and said, "I


will have nothing to do with it because it is interference with free collective bargaining." What will the hon. Member do with his voluntary policy when it is defied? Will he retreat? Although no evolution of a prices and incomes policy is easy, I think he is making a big mistake if he imagines that some easy alternative flows in his direction through the operation of a voluntary policy.
Frankly, I believe that the consequences of the passing of this Amendment tonight would be that a prices and incomes policy, voluntary or compulsory, would be left in ruins and the country would be back with no economic alternative. Let me tell my hon. Friends why I am supporting this Bill. My hon. Friend the Member for Bothwell (Mr. James Hamilton) asked if I was not an unwilling victim of the circumstances. I would make it clear to him and to other hon. Members on both sides of the House that this is not merely a Bill which I invented; it is a Bill which I endorse, and I do so for the very simple reason that I do not believe that the trade union movement of our country thinks that there is a great issue of principle here. I say that because I believe that that movement is not so concerned about the statutory powers taken for this or that as about the level of its members' pay and, what is perhaps more important, about the level of their real earnings. So far as the suggestion that this policy is taking their minds off growth and productivity is concerned, then, on the contrary, I support this policy because it concentrates their minds on these things. —[Laughter.]—Right hon. and hon. Members opposite may have their mirth, but I can tell them that anyone who has been dealing with this pay and productivity question knows that the trade unions, and managements, are becoming productivity minded in a way which has never before been known in this country.
That is a fact which is incontrovertible. There is no doubt that our discussions have been difficult. As the processing of this policy has gone on, we have found that the prices and incomes policy has compelled us to talk in terms of productivity in a way which has not happened before. I support this Bill because we cannot have the real improve-

ment in the pay and conditions of our trade union members unless we do relate prices, incomes and productivity.
I have been challenged, but I say unequivocally to hon. Members that it is not true to suggest that this Bill represents some secret or overt commitment to the I.M.F.—[AN HON. MEMBER: "Isn't it?"]—no, it is not. The Letter of Intent was written well before the Government decided on the introduction of this Bill. We decided that it was necessary, in the light of our own assessment of our economic needs, to introduce this Bill. We decided that in the light of our own assessment of what was necessary in the way of prices and incomes guidance in order to strengthen the competitive advantage which devaluation had given us.
Indeed, Mr. Speaker, I believe that there is a far better, and a far stronger, case for the Bill than for the two previous Acts which were introduced by this Government on prices and incomes —[Interruption]

Mr. Speaker: Order. The House has listened to both sides of the case until now.

11.30 p.m.

Mrs. Castle: Because it is set in the context of an economic policy of expansion—indeed, it is the best way of enabling that expansion to take place without our running into balance of payments difficulties again—I support the Bill. I urge the House to reject the Amendment, because I believe that it is integrally linked with whether one believes in the need for a prices and incomes policy at all, voluntary or compulsory, and because it is integrally linked with whether we are seeking an economic alternative to the kind of free-for-all which brought this country into its present desperate straits.

Sir Harmar Nicholls: It will be within the recollection of the House that the right hon. Lady promised to answer a question put to her by my hon. Friend the Member for Oswestry (Mr. Biffen) relating to Clauses 13 to 22. Is the right hon. Lady not going to fulfil her promise?

Hon. Members: Sit down.

Sir Harmar Nicholls: It is obvious that the right hon. Lady does not intend


to reply. In that case I claim my right to have the Floor. The right hon. Lady, in the course of her speech, promised that she would answer a question put to her by my hon. Friend the Member for Oswestry. That question was relevant to the point that the right hon. Lady was making in her speech. The First Secretary has now sat down without making any reference to the question. That is cheating the House.

Mr. Sandys: The right hon. Lady's promise has evolved. [Laughter.]

Sir Harmar Nicholls: To maintain her own credibility in the very difficult task that she has to pursue, will the right

Division No. 241.]
AYES
[11.32 p.m. 


Alison, Michael (Barkston Ash)
d'Avigdor-Goldsmid, Sir Henry
Higgins, Terence L.


Allason, James (Hemel Hempstead)
Dean, Paul (Somerset, N.)
Hiley, Joseph


Allaun, Frank (Salford, E.)
Deedes, Rt. Hn. W. F. (Ashford)
Hill, J. E. B.


Astor, John
Dickens, James
Hirst, Geoffrey


Atkins, Humphrey (M't'n &amp; M'd'n)
Digby, Simon Wingfield
Hogg, Rt. Hn. Quintin


Atkinson, Norman (Tottenham)
Dodds-Parker, Douglas
Holland, Philip


Awdry, Daniel
Doughty, Charles
Hordern, Peter


Raker, Kenneth (Acton)
Douglas-Home, Rt. Hn. Sir Alec
Hornby, Richard


Baker, W H. K. (Banff)
Drayson, C. B.
Howell, David (Guildford)


Balniel, Lord
du Cann, Rt. Hn. Edward
Hughes, Emrys (Ayrshire, S.)


Barber, Rt. Hn. Anthony
Eden, Sir John
Hughes, Roy (Newport)


Batsford, Brian
Elliot, Capt. Walter (Carshalton)
Hunt, John


Beamish, Col. Sir Tufton
Elliott,R.W.(N'c'tle-upon-Tyne,N.)
Hutchison, Michael Clark


Bell, Ronald
Emery, Peter
lrvine, Bryant Godman (Rye)


Bennett, Sir Frederic (Torquay)
Errlngton, Sir Eric
Jackson, Peter M. (High Peak)


Bennett, Dr. Reginald (Gos. &amp; Fhm)
Evans, Gwynfor (C'marthen)
Jeger, Mrs.Lena(H'b'n&amp;St.P'cras S )


Berry, Hn. Anthony
Ewing, Mrs. Winifred
Jenkin, Patrick(Woodford)


Biffen, John
Eyre, Reginald
Jennings, J. C. (Burton)


Biggs-Davison, John
Farr, John
Johnson Smith, G. (E. Grinstead)


Birch, Rt. Hn. Nigel
Fisher, Nigel
Arthur (Northants S.)


Black, Sir Cyril 
Fletcher, Ted (Darlington)
Jones,Arthur (Northants, S.)


Blaker, Peter
Fletcher-Cooke, Charles
Jopling, Michael


Boardman,Tom (Leicester, S.W.)
Foot, Michael (Ebbw Vale)
Joseph, Rt. Hn. Sir Keith


Body, Richard
Forstescue, Tim
Kaberry, Sir Donald


Booth, Albert
Foster, Sir John
Kelley, Richard


Bossom, Sir Clive
Fraser,Rt.Hn.Hugh(St'fford &amp; Stone)
Kerby, Capt. Henry


Boyle, Rt. Hn. Sir Edward
Galbralth, Hn. T. G.
Kerr, Mrs. Anne (R'ter &amp; Chatham)


Braine, Bernard
Gibson-Watt, David
Kerr, Ruseel (Fltham)


Brewis, John
Giles, Rear-Adm. Morgan
Kershaw, Anthony


Brinton, Sir Tatton
Gilmour, Ian (Norfolk, C.)
Kimball, Marcus


Brown, Sir Edward (Bath)
Gilmour, Sir John (Fife, E.)
King Evelyn (Dorset, S.)


Bruce-Gardyne, J.
Glover, Sir Douglas
Kirk, Peter


Bryan, Paul
Glyn, Sir Richard
Kitson, Timothy


Buck, Antony (Colchester)
Godber, Rt. Hn. J. B.
Knight, Mrs. Jill


Bullus, Sir Eric
Goodhart, Philip
Lancaster, Col. C. G.


Burden, F. A.
Goodhew, Victor
Lane, David


Campbell, B. (Oldham, W.)
Gower, Raymond
Langford-Holt, Sir John


Campbell, Gordon (Moray &amp; Nairn)
Grant, Anthony
Lee, John (Reading)


Carr, Rt. Hn. Robert
Grant-Ferris, R.
Legge-Bourke, Sir Harry


Channon, H. P. G.
Gresham Cooke, R.
Lewis, Kenneth (Rutland)


Chichester-Clark, R.
Grieve, Percy
Lloyd,Rt.Hn.Geoffrey(Sut'nC'dfield)


Clark, Henry
Griffiths, Eldon (Bury St. Edmunds)
Lloyd, Ian (P'tsm'th, Langstone)


Clegg, Walter
Gurden, Harold
Lloyd, Rt. Hn. Selwyn (Wirral)


Cooke, Robert
Hall, John (Wycombe)
Longden, Gilbert


Cooper-Key, Sir Neill
Hall-Davis, A. G. F.
Loveys, W. H.


Cordle, John
Hamilton, Lord (Fermanagh)
MacArthur, Ian


Corfield, F. V.
Hamilton, Michael (Salisbury)
Maclean, Sir Fitzroy


Costain, A.P.
Harris, Frederic (Croydon, N.W.)
Macleod, Rt. Hn. lain


Craddock, Sir Beresford (Spelthorne)
Harrison, Brian (Maldon)
McMaster, Stanley


Crosthw.iiie-Eyre, Sir Oliver
Harrison, Col. Sir Harwood (Eye)
Macmillan, Maurice (Farnham)


Crouch, David
Hastings, Stephen
Maddan, Martin


Crowder, F. P.
Hay, John
Maginnis, John E.


Cunningham, Sir Knox
Heald, Rt. Hn. Sir Lionel
Marten, Nell


Currie, G. B. H.
Heath, Rt. Hn. Edward
Maude, Angus


Dalkeith, Earl of
Heffer, Eric S.
Maudling, Rt. Hn. Reginald


Dance, James
Heseltine, Michael
Mawby, Ray

hon. Lady keep the promise she made, within the recollection of the House, about 10 minutes ago and answer the question put to her by my hon. Friend the Member for Oswestry? The question is relevant and important, and it should be answered in the context of the right hon. Lady's speech.

Hon. Members: Answer.

Mr. Speaker: Order.

Question put, That the Amendment be made: —

The House divided: Ayes 263, Noes 281.

Maxwell-Hyslop, R. J.
Pike, Miss Mervyn
Stoddart-Scott, Col. Sir M. (Ripon)


Maydon, Lt.-Cmdr. S. L. C.
Pink, R. Bonner
Summers, Sir Spencer


Mendelson, J. J.
Pounder, Rafton
Tapscll, Peter


Mills, Peter (Torrington)
Powell, Rt. Hn. J. Enoch
Taylor, Sir Charles (Eastbourne)


Mills, Stratum (Belfast, N.)
Price, David (Eastleigh)
Taylor, Edward M. (G'gow,Cathcart)


Miscampbell, Norman
Prior, J. M. L.
Teeling, Sir William


Mitchell, David (Baslngstoke)
Pym, Francis
Temple, John M.


Monro, Hector
Quennell, Miss J. M.
Thatcher, Mrs. Margaret


Montgomery, Fergus
Ramsden, Rt. Hn. James
Tilney, John


More, Jasper
Rawlinson, Rt. Hn. Sir Peter
Turton, Rt. Hn. R. H.


Morrison, Charles (Devizes)
Rees-Davies, W. R.
van Straubenzee, W. R.


Mott-Radclyffe, Sir Charles
Renton, Rt. Hn. Sir David
Vaughan-Morgan, Rt. Hn. Sir John


Munro-Lucas-Tooth, Sir Hugh
Rhys Williams, Sir Brandon
Walker, Peter (Worcester)


Murton, Oscar
Ridley, Hn. Nicholas
Walker-Smith, Rt. Hn. Sir Derek


Nabarro, Sir Gerald
Ridsdale, Julian
Wall, Patrick


Neave, Airey
Robson Brown, Sir William
Walters, Dennis


Newens, Stan
Rodgere, Sir John (Sevcnoaks)
Ward, Dame Ircne


NichollS, Sir Harmar
Rossi, Hugh (Hornsey)
Weatherill, Bernard


Noble, Rt. Hn. Michael
Royle, Anthony
Webster, David


Norwood, Christopher
Russell, Sir Ronald
Wells, John (Maidstone)


Nott, John
Ryan, John
Whitelaw, Rt. Hn. William


Onslow, Cranlcy
St. John-Stevas, Norman
Williams, Donald (Dudley)


Orr, Capt. L. P. S.
Sandys, Rt. Hn. D.
Wills, Sir Gerald (Bridgwater)


Orr-Ewing, Sir Ian
Scott, Nicholas
Wilson, Geoffrey (Truro)


Osborn, John (Hallam)
Scott-Hopkins, James
Wolrige-Gordon, Patrick


Page, Graham (Crosby)
Sharpies, Richard
Wood, Rt. Hn. Richard


Page, John (Harrow, W.)
Shaw, Michael (Sc'b'gh &amp; Whitby)
Woodnutt, Mark


Paget, R. T.
Silvester, Frederick
worsley, Marcus


Park, Trevor
Smith, Ductley (W'wick &amp; L'mlngton)
wylie, N. R.


Pearson, Sir Frank (Clitheroe)
Smith, John (London &amp; W'minster)
Younger, Hn. George


Peel, John
Speed, Keith



Perclval, Ian
Stainton, Keith
TELLERS FOR THE AYES:


Peyton, John
Stodart, Anthony
Mr. Ian Mikardo and




Mr. Stanley Orme.




NOES


Albu, Austen
Crosland, Rt. Hn. Anthony
Gourlay, Harry


Alldritt, Walter
Crossman, Rt. Hn. Richard
Gray, Dr. Hugh (Yarmouth)


Allen, Scholefield
Cullen, Mrs. Alice
Greenwood, Rt. Hn. Anthony


Anderson, Donald
Dalyeil, Tam
Grey, Charles (Durham)


Archer, Peter
Darling, Rt. Hn. George
Griffiths, David (Rother Valley)


Ashley, Jack
Davidson, Arthur (Accrlngton)
Griffiths, Eddie


Bacon, Rt. Hn. Alice
Davidson,James(Aberdeenshire,W.)
Griffiths, Rt. Hn. James (Llanelly)


Bagier, Gordon A. T.
Davies, Ednyfed Hudson (Conway)
Gunter, Rt. Hn. R. J.


Barnes, Michael
Davies, G. Elfed (Rhondda, E.)
Hamilton, James (Bothwell)


Baxter, William
Davies, Dr Ernest (Stretford)
Hamling, Wiiliam


Bence, Cyril
Davies, Ifor (Gower)
Hannan, William


Benn, Rt. Hn. Anthony Wedgwood
de Freitas, Rt. Hn. Sir Geoffrey
Harrison, Walter (Wakefield)


Bennett, James (G'gow, Bridgeton)
Delargy, Hugh
Hart, Rt. Hn. Judith


Binns, John
Dell, Edmund
Hattersley, Roy


Bishop, E. S.
Dempsey, James
Hazell, Bert


Blackburn, F.
Dewar, Donald
Hazell, Bert


Blenkinsop, Arthur
Dobson, Ray
Healey, Rt. Hn. Denis


Boardman, H. (Leigh)
Doig, Peter
Henig, Stanley


Boston, Terence
Dunn, James A.
Herbison, Rt. Hn. Margaret


Bottomley, Rt. Hn. Arthur
Dunnett, Jack
Hilton, w. s.


Boydcn, James
Dunwoody, Mrs. Gwyneth (Exeter)
Houghton, Rt. Hn. Douglas


Braddock, Mrs. E. M.
Dunwoody, Dr. Jonh (F'th &amp; C'b'e)
Howarth, Harry (Wellingborough)


Bradley, Tom
Eadie, Alex
Howarth Robert (Bolton, E.)


Bray, Dr. Jeremy
Edelman, Maurice
Howell, Denis (Small Heath)


Brooks, Edwin
Edwards, Robert (Bitston)
Howie, W.


Brown, Rt. Hn. George (Betper)
Edwards, William (Merioneth)
Hoy, James


Brown, Hugh D. (G'gow, Provan)
Ellis, John
Huckfield, Leslie


Brown,Bob(N'Ctie-upon-Tyne,W.)
English, Michael
Hughes, Rt. Hn. Cledwyn (Anglesey)


Brown, R. W. (Shoreditch &amp; F'bury)
Ennals, David
Hughes, Hector (Aberdeen, N.)


Buchan, Norman
Ensor, David
Hunter, Adam


Buchanan, Richard (G'gow, Sp'burn)
Evans, Albert (Islington, S.W.)
Hyna, John


Butler, Herbert (Hackney, C.)
Evans, loan L. (Birm'h'm, Yardley)
Irvine. Sir Arthur (Edge Hill)


Butler, Mrs. Joyce (Wood Green)
Faulds, Andrew
Jackson, Colin (B'h'se &amp; Spenb'gh)


Callaghan, Rt. Hn. James
Fernyhough, E.
Janner, Sir Barnett


Cant, R. B.
Fitch, Alan (Wigan)
Jay, Rt. Hn. Douglas


Carmichael, Neil
Fletcher, Raymond (Iikeston)
Jenkins, Rt. Hn. Roy (Stechford)


Carter-Jones, Lewis
Foley, Maurice
Johnson, Carol (Lewisham, S.)


Castle, Rt. Hn. Barbara
Foot, Rt. Hn. Sir Dingle (Ipswich)
Johnson, James (K'ston-on-Huff W.)


Chapman, Donald
Ford, Ben
Jones, Dan (Burnley)


Coe, Denis
Forrester, John
Jones,Rt.Hn.SirElwyn(W.Ham,S.)


Coleman, Donald
Fowler, Gerry
Jones, J. Idwal (Wrexham)


Concannon, J. D.
Fraser, John (Norwood)
Jones, T. Alec (Rhondda, West)


Conian, Bernard
Freeson, Reginald
Judd, Frank


Corbet, Mrs. Freda
Gardner, Tony
Kenyon, Clifford


Craddock, Ceorge (Bradford, S.)
Garrett, W. E.
Kerr, Dr. David (W'worth, Central)


Crawshaw, Richard
Ginsburg, David
Lawson, George


Cronin, John
Gordon Walker, Rt. Hn. P. C.
Leadbitter, Ted

Ledger, Ron
Morris, John (Aberavon)
Silkin, Rt. Hn. John (Deptford)


Lee, Rt. Hn. Frederick (Newton)
Moyle, Roland
Silkin, Hn. S. c. (Dulwich)


Lee, Rt. Hn. Jennie (Cannock)
Mulley, Rt. Hn. Frederick
Skeffington, Arthur


Lestor, Miss Joan
Murray, Albert
Slater, Joseph


Lever, Harold (Cheetham)
Neal, Harold
Small, William


Lever, L. M. (Ardwick)
Noel-Baker, Francis (Swindon)
Snow, Julian


Lewis, Ron (Carlisle)
Noel-Baker,Rt.Hn.Philip (Derby, S.)
Spriggs, Leslie


Lomas, Kenneth
Oakes, Gordon
Steele, Thomas (Dunbartonshire, W.)


Loughlin, Charles
Ogden, Eric
Storehouse, Rt. Hn. John


Luard, Evan
O'Malley, Brian
Strauss, Rt. Hn. G. R.


Lubbock, Eric
Oram, Albert E.
Swingler, Stephen


Lyon, Alexander W. (York)
Oswald, Thomas
Symonds, J. B.


Lyons, Edward (Bradford, E.)
Owen, Dr. David (Plymouth, S'tn)
Taverne, Dick


Mabon, Dr. J. Dickson
Page, Derek (King's Lynn)
Thomas, Rt. Hn. George


MacBride, Neil
Palmer, Arthur
Thomson, Rt. Hn. George


McCann, John
Pannell, Rt. Hn. Charles
Thornton, Ernest


MacColl, James
Pardoe, John
Tinn, James


MacDermot, Niall
Parker, John (Dagenham)
Urwin, T. W.


Macdonald, A. H.
Parkin, Ben (Paddington, N.)
Varley, Eric G.


McGuire, Michael
Parkyn, Brian (Bedford)
Wainwright, Edwin (Dearne Valley)


Mackenzie, Alasdair (Ross&amp;Crom'ty)
Pavitt, Laurence
Wainwright, Richard (Colne Valley)


Mackenzie, Gregor (Rutherglen)
Pearson, Arthur (Pontypridd)
Walker, Harold (Doncaster)


Mackie, John
Peart, Rt. Hn. Fred
Wallace, George


Mackintosh, John P.
Pentland, Norman
Watkins, David (Correett)


Maclennan, Robert
Perry, Ernest G. (Battersea, S.)
Watkins, Tudor (Brecon &amp; Radnor)


McMillan, Tom (Glasgow, C.)
Prentice, Rt. Hn. R. E.
Weitzman, David


McNamara, J. Kevin
Price, Christopher (Perry Barr)
Wellbeloved, James


MacPherson, Malcolm
Price, Thomas (Westhoughton)
Wells, William (Walsall, N.)


Mahon, Peter (Preston, S.)
Price, William (Rugby)
White, Mrs. Eirene


Mahon, Simon (Bootle)
Randall, Harry
Whitlock, William


MalIalieu, J.P.W. (Huddersfield, E.)
Rees, Merlyn
Wilkins, W. A.


Manuel, Archie
Reynolds, Rt. Hn. G. W.
Williams, Alan (Swansea, W.)


Marks, Kenneth
Rhodes, Geoffrey
Williams, Alan Lee (Hornchurch)


Marquand, David
Richard, Ivor
Williams, Clifford (Abertillery)


Marsh, Rt. Hn. Richard
Roberts, Albert (Normanton)
Williams, Mrs. Shirley (Hitchin)


Mason, Rt. Hn. Roy
Roberts, Rt. Hn. Goronwy
Williams, W. T. (Warrington)


MaxwelI, Robert
Roberts, Gwilym (Bedfordshire, S.)
 Willis, Rt. Hn. George


Mayhew, Christopher
Robertson, John (Paisley)
Wilson, Rt. Hn. Harold (Huyton)


Mellish, Rt. Hn. Robert
Robinson, Rt. Hn. Kenneth (St.P'c'as)
Wilson, William (Coventry, S.)


Millan, Bruce
Robinson, W. O. J. (Walth'stow, E.)
Winstanley, Dr. M. P.


Miller, Dr. M. S.
Rodgers, William (Stockton)
Woodburn, Rt. Hn. A.


Milne, Edward (Biyth)
Roebuck, Roy
Woof, Robert


Mitchell, R. C. (S'th'pton, Test)
Rogers, George (Kensington, N.)
Wyatt, Woodrow


Molloy, William
Rose, Paul
Yates, Victor


Moonman, Eric
Ross, Rt. Hn. William



Morgan, Elystan (Cardiganshire)
Shaw, Arnold (llford, S.)
TELLERS FOR THE NOES:


Morris, Alfred (Wythenshawe)
Shore, Rt. Hn. Peter (Stepney)
Mr. Joseph Harper and


Morris, Charles R. (Openshaw)
Short, Rt. Hn. Edward (N'c'tle-u-Tyne)
Mr. Ernest Armstrong.

Further consideration of the Bill, as amended, adjourned.—[Mr. O'Malley.]

Bill, as amended, to be further considered Tomorrow.

Orders of the Day — ASSOCIATED STATES (GIFT OF A PARLIAMENTARY LIBRARY)

11.50 p.m.

The Lord Privy Seal and Leader of the House of Commons (Mr. Fred Peart): I beg to move,
That Mr. Frank Tomney and Mr. David Webster have leave of absence to present, on behalf of this House, a Parliamentary Library to the Legislatures of the Associated States of St. Christopher, Nevis and Anguilla, Antigua, Dominica, St. Lucia and Grenada.
The House will recall that on Tuesday, 21st May, it approved of the presentation of an independence gift to the Associated States. The Motion gives leave of absence to a small delegation to present the gift on our behalf. The House may wish to know the composition of the delegation arranged with you, Mr. Speaker, and that it will be accompanied by Mr. David Pring, a Clerk of the House.

Question put and agreed to.

Orders of the Day — SCOTTISH REGIMENTS (FUTURE)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Harper.]

11.52 p.m.

Mr. Hector Monro: It is a happy coincidence that today the new Scottish Division was formed officially and the new divisional commander, Maj.-General F. Graham, raised his flag in Scotland. This debate takes place in face of another White Paper that may reduce again the number of Scottish regiments. We view this with grave concern. The timing of the debate may be inconvenient to the Government because of the White Paper which is coming out in a few weeks' time, but it is essential that the Minister understands the strong feeling of hon. Members and of the Scottish people. From bitter experience, we have found that it is no use trying to influence the Government after a White Paper is published; we must make our impression now.
The Army has been reducing in size for a long time, and we accept that this may have been necessary to suit modern conditions, but amalgamations and disbandments in the past are no argument

for continuing this policy in the future. We think that this has gone far enough and at the present point we make our stand.
Governments in the past have decreed that strengths must be reduced, but we contend that the limit has been reached, and that in any event Scotland has lost disproportionately too many regiments. It is true to say that in times of stress it is always the infantry that bears the brunt, and there are never enough foot soldiers available. However, the past is past, including, tragically, the Cameronians, and on 1st July we have the new Scottish Division, in which separate identities are retained, and this is important.
In the Lowland Brigade we will have the Royal Scots, the Royal Highland Fusiliers and the King's Own Scottish Borderers. In the Highland Brigade we will have the Black Watch, the Queen's Own Highlanders, the Gordon Highlanders, the Argyll and Sutherland Highlanders and there will still be two battalions of Scots Guards, and, in the Royal Armoured Corps, the Royal Scots Greys.
Within the Scottish Division there will be great flexibility and cross-posting, which has happened frequently in the past. There will be an interchange of officers and friendly competition, yet they will retain their own tartans, their individual traditions, the regimental areas and the common bond of being Scots.
The Minister must realise that these things mean something in Scotland. He should have seen the welcome home of our regiments from service overseas. I remember well the King's Own Scottish Borderers returning from Malaya. All of us in Scotland have been tremendously impressed with the welcome home of the Argyll and Sutherland Highlanders from Aden, and this shows how out of touch are those who advocate large regiments, of a single Highland regiment, a single Lowland regiment or, indeed, of a corps of infantry.
The regiments in the Scottish Division have an exceptional record of efficiency and recruiting. In most regimental areas, recruiting amounts to about 60 per cent., and in the case of the Black Watch, it is exceptionally high, with 90 per cent. However, in view of the very serious fall in recruiting to the Army generally, which was announced yesterday in reply to a


Question by my hon. Friend the Member for Ayr (Mr. Younger), the Scottish achievements must sound like pipe music to the Minister's ear. Scotland's efforts in recruiting must not be overlooked, and if recruits want to join Scottish regiments, those regiments ought not to be disbanded.
In reply to a Question by my hon. Friend the Member for North Angus and Mearns (Mr. Buchanan-Smith), who is tonight in his own regimental area, the Minister set out the organisation of infantry as from 1st July, 1968. There will be six divisions and 56 battalions. That represents an average of just over nine per division. Of those 56 battalions, 39 are English, four are Welsh, four are Irish and nine are Scots, the latter figure including the two Scots Guards battalions which are not in the Scottish Division.
Statistically, if two or three battalions are to be disbanded, it would seem right that they should come from the 39 English infantry battalions which, it must be said, do not appear to be as concerned about their future as those of the Scottish regiments.
Looking at the divisions, the Guards Division has eight battalions, the Queen's has 12, the King's has 11, the Prince of Wales' has 11, the Light—a rather special —Division has seven and the Scots has seven battalions. So we are again below average.
I turn to the Royal Armoured Corps and particularly the Royal Scots Greys, which is the only Scottish cavalry regiment and certainly the most famous. There are 20 regiments of the Royal Armoured Corps. Surely Scotland is entitled to one of them. To amalgamate the Greys with an English regiment would immediately destroy its unique and special character. It is the best recruited regiment in the British Army, and that was confirmed again today in reply to a Parliamentary Question by my hon. Friend the Member for Ayr. 
It is because of its remarkable recruiting that frequently it has been able to lend squadrons to other cavalry regiments which are short-handed. To the extent of 80 per cent., it is recruited from the regimental area. That must be exceptional in the Royal Armoured Corps. Efficiency is very high. It was chosen to represent the Army in the N.A.T.O. Tank Gun-

nery Competition this year. If the Royal Armoured Corps is to have another reorganisation, surely a new individual rôle should be found for this outstanding regiment. I cannot over-emphasise how much this fine regiment means to Scotland.
On 11th May, 1967, the Minister of Defence announced changes in the infantry, and perhaps I might quote three extracts from his replies. Talking about regiments retaining their separate identities, the Minister said:
I should like to make it clear that this new organisation does not affect the separate identity of the individual regiments.
Secondly, he said:
I am glad to confirm that battalions will retain their existing names.
Thirdly, dealing with another Question from my hon. Friend the Member for Moray and Nairn, he said:
I recognise that very well, and would point out that regimental and battalion identities are not affected by this regrouping."—[OFFICIAL REPORT, 11th May, 1967; Vol. 746, c. 1714– 116.]
That seemed a clear indication. However a few weeks later the Cameronians were scrapped. It is interesting, too, in mentioning this fine regiment that is no more, that all the officers and men have been posted to other regiments in the Scottish Division. There are 18 officers and 80 other ranks in the King's Own Scottish Borderers now. Would it not be intolerable if those officers and men had to face another amalgamation or another disbandment? That would be asking too much of any soldier.
This concern about the future has been heightened by The Times leading article on 17th June. I hope that it was not an inspired leak. It was full of foreboding and contained a threat that, if the regiments did not become more flexible, it would result in a corps of infantry. How can this attitude promote confidence in a career structure? The Army thinks that its regimental future has been jeopardised for administrative convenience. This thought must certainly have been prominent in the mind of Colonel Colin Mitchell of the Argyll and Sutherland Highlanders when he sent in his papers last week. His own future seemed to have reached a full stop and the future of his regiment is in grave doubt.
The public sees it in this way. Here is a born leader, a very gallant officer. Many think him to be quite the best battalion commander in the Army. Yet, despite promises specifically made by the Secretary of State earlier this year that his promotion would not be retarded, he has been driven from the Army. Leaders of this calibre are all too few. What Colin Mitchell did for his country in Aden, for his regiment and for the Army should be proclaimed from the roof tops, and accelerated promotion should be his. On no account should the Army and Scotland lose his services. I hope that the Under-Secretary will say something about this, because the feeling in Scotland is very strong indeed, particularly in the light of the Secretary of State's assurance earlier this year.
The regimental system is the envy of every other army in the world. It harnesses together local and family pride, and particularly so in Scotland. This interest in the regiment is backed up by local recruiting and reciprocated with efficiency and performance by the soldiers themselves. It is interesting to recall how very many senior Army officers have come from Scottish regiments. Lord Wavell was one of the most progressive field marshals. He said this 20 years ago:
The regiment is the foundation of everything, and nowhere is the regimental spirit stronger than in the Highlands. It is the fashion today in some quarters to seek a soulless uniformity in all things and decry any individual tradition and spirit. It will be a sad day and an evil day for the British Army if the reformers ever succeed in weakening or destroying the regimental tradition.
That was very true then. It is equally true today, but the situation is very much more serious.
I have stressed flexibility and accepted the necessity for reorganisation. Surely this can be done without demolishing that essential enthusiasm built up through this tradition. Military success depends on character, morale and leadership. It takes years to develop, yet can be destroyed overnight by political decision.
I hope that I have shown the strong case for the retention of the complete Scottish Division, with each regiment retaining its separate identity, and for

the retention of the Royal Scots Greys in the Royal Armoured Corps. On every count—statistically, on recruiting, and on efficiency—the Government should keep their hands off Scotland's regiments, which are providing a rich dividend for the Army. Let the Government take heed of Scotland's feelings. I say this to the Minister with great sincerity, and let him realise that a weak reply tonight and any sheltering behind a forthcoming White Paper will not be acceptable in Scotland. I hope that he will be more forthcoming and give an encouraging reply that certainly where regiments mean something they will be retained.

12.5 a.m.

Mr. Malcolm MacPherson: I am glad of the opportunity to speak for a minute or two in this short debate. The hon. Member for Dumfries (Mr. Monro) has spoken with a feeling for the Scottish regiments and the Scottish tradition in soldiering which we all share. I have no quarrel with him on that. The traditions of the regiments and the Scottish part in the British Army have for a long time played a considerable part in Scottish life. But I feel that the hon. Gentleman has spoken too much about the past and too little about the problems of the future. One cannot think of this sort of situation simply in terms of our tradition, no matter how distinguished and admirable the tradition is. One must see it in terms of necessary reorganisation in face of a different kind of defence, a different kind of defence policy and a different kind of defence organisation.
I shall not refer to the Royal Scots Greys, but I am concerned with the Highland Brigade and, in particular, with the regiment which has its headquarters in my constituency, the Argylls. I am not sure whether the hon. Gentleman was talking with knowledge when he spoke of Colonel Mitchell being driven from the Army. If he was, he knows more than we do. Perhaps my hon. Friend the Minister will comment on that. I have been much concerned about Colonel Mitchell, but I have no knowledge that that is the situation, and I shall be glad if my hon. Friend will say something to clear the matter up.
The tradition of the Argylls and of other Scottish regiments is likely to be


preserved. In any case, we know from our past history that not only in recent years have there been military reorganisations which have lost something which had great tradition and glory in the past. This is not the only period, not even the only century. It has happened before. It is part of our continuing process. I look forward to Scotsmen playing just as strong a part in the defence of this island as in the past.

12.7 a.m.

Mr. Gordon Campbell: I support my hon. Friend the Member for Dumfries (Mr. Monro), who has admirably expressed the feelings of all Scottish Members and the feelings of Scotland itself in this matter. Scotland has been able to provide a supply of great military manpower, and Scotland also has a military tradition which the Government should not lightly cast aside. In recent years—I speak of the very recent past—Highland battalions in particular have demonstrated the truth of that in Brunei, Borneo and Aden, where they have carried out tricky and most successful operations.
British infantry, and Scottish infantry in particular, have a special ability to cope with and settle difficult political and military situations. Their special ability will be needed in the future. It is needed now in the United Nations force in Cyprus, and it will be needed hereafter either under United Nations auspices or in other circumstances. But, once destroyed, as my hon. Friend said, it is well nigh impossible to recreate military formations of this kind.
Last year, within a day or two of the event, I drew from the Secretary of State for Defence a tribute to what the Argylls had done in reoccupying Crater. Also, as my hon. Friend said, I obtained an assurance from the right hon. Gentleman that the identities of the Scottish regiments would be retained. Unfortunately, since then there has been one disbandment. I ask the Government to ensure that those identities continue to be retained and that there are no further disbandments. The Government should consider carefully the special contribution which Scotland can give to Britain's defence.

12.10 a.m.

Mr. Hector Hughes: I am grateful to the hon. Member for Dumfries (Mr. Monro) for having chosen this subject for debate. I have had on the Order Paper for a long time a Motion to very much the same effect, but I was not as fortunate as he was in the Ballot for an Adjournment debate.
It is entirely wrong that the Scottish regiments should be left in doubt about their future. They are gallant regiments which have rendered great service to the State. Their officers and men are good citizens with families in Scotland, and it is right that their families should not be left in doubt. Therefore, I ask my hon. Friend the Under-Secretary of State to make a definite statement about the future of these gallant gentlemen who have been left in the undignified position that they and their families do not know what their present is and what their future will be. I strongly support the hon. Member for Dumfries.

12.11 a.m.

The Under-Secretary of State for Defence for the Army (Mr. James Boyden): I am most grateful to the hon. Member for Dumfries (Mr. Monro) for raising the question of the future of the Scottish regiments tonight. I go a long way with him in paying tribute to the efficiency, courage and military splendidness of the Scottish regiments. There has been a good deal of discussion in the Press about the effect which the White Paper, which will appear next month, might or might not have on the Scottish units. I am very glad that we have had an opportunity tonight for Scottish hon. Members to express their views on the matter. Those views are passionately held, as the House has seen tonight, and very rightly held.
I am not insensitive to the strength of feeling associated with the Scottish regiments. I know that they command very fierce local pride and tremendous loyalty. I can go a long way back to the 1914 war, when one of the joys of my heart as a child of four and five was to hear the Scottish regiments go past my door on the way to France. This spirit is the basis of the Scottish fighting record, which has played a magnificent part in the history of the British Army and of Scotland.
Because the future of these regiments arouses such emotion it is right and proper tonight to look at it against the wider background and perspective of the Government's overall defence policy. As a result of the cut in our commitments outside Europe, we announced last July that the Army would be reduced in size by 15,000 all ranks by 1971. As we said in the White Paper, this meant the disappearance of 17 major units, including eight infantry battalions and four armoured units. That is a slight correction to what the hon. Gentleman said about the infantry taking the brunt of the cuts. Many of these are regiments —Scottish, Irish, Welsh and English regiments—with long and distinguished histories. But much as we regret their disappearance a reduction in major units follows inevitably from the Government's decision to reduce the number of tasks to be undertaken by the Army by concentrating our future defence effort mainly in Europe and the North Atlantic area.
As my right hon. Friend the Prime Minister announced to the House last January, the whole of our defence expenditure was again reviewed against the background of our commitments and alliances. The defence decisions taken at this time were summarised in the Statement on Defence Estimates, 1968. They will lead to big changes—and this is the essence of the matter tonight— in the role, size and shape of the Forces, their equipment and support.
For the Army their immediate effect has been to accelerate the rate of rundown and the disbandment or amalgamation of major units. As I have told the House on many occasions over the last few months, a list of the further reductions in major units will be announced in the supplementary statement which the Government will present to the House next month. It is naturally very sad to have to make these reductions, but they follow inevitably from the Government's decision to cut defence commitments and expenditure. I can assure hon. Members that they will have a very good opportunity to debate this very soon. I can assure the House that the Army that will be left when the cuts have been made will be a good Army, with a good career for officers and men,

and well able to carry out its rôle effectively in the 1970's.
Hon. Members will appreciate that for the reductions announced last July, the selection of particular infantry battalions and other regiments for reduction was a most difficult and painful task for the Secretary of State and the Army Board. We did not go into the exact criteria for our selection then, nor do I intend to do so now. It would only exacerbate the inevitable pain caused by the reduction, as well as providing the opportunity for endless and fruitless arguments, which would not get anywhere, on the comparative merits of individual battalions and regiments.
I agree with the kind of remarks which the hon. Member made about particular regiments. I could certainly make out a very good case for the D.L.I., and everyone can make a case for these particular regiments because they are splendid regiments and we are very proud of them.
I think the Army Board has done a very good job in the way it has faced up to this difficult task. We took many considerations into account, especially the strong national feeling in Scotland and I might add in Wales, Ireland and Durham. We have weighed all these factors with the greatest care, and the aim the Army Board set itself was to arrive at a solution which would be in the best long-term interests of the infantry as a whole.
I am confident that we achieved this aim, and I have no reason to doubt that the majority of the infantry have accepted these cuts with their traditional loyalty, and will accept the decisions to come.
Following the cuts announced by the Prime Minister last January, the Government are again faced with the difficult task of selecting further major units for reduction. The final decisions have not yet been taken, and this is why the debate tonight is so useful. I can give the House the assurance that what has been said, and the strong feeling in Scotland, will be taken fully into consideration by my right hon. Friend. I am confident that we shall again reach a solution which will be fair and in the best interests of the infantry as a whole.
I should like to remind right hon. and hon. Gentlemen opposite that this Government are not alone in making cuts in


Scottish regiments. The Scottish regiments did not remain immune from the reductions initiated by the party opposite in 1957. At that time the Royal Scots Fusiliers and the Highland Light Infantry amalgamated to form the Royal Highland Fusiliers, and the Seaforth Highlanders and the Queen's Own Cameron Highlanders amalgamated to form the Queen's Own Highlanders.
Moreover, there is no evidence that over the years Scotland has been unfairly treated in the matter of reductions. The cuts announced last July reduced the number of Scottish battalions—and I include the two battalions of the Scots Guards—from 12 in 1950 to nine, a decrease of 25 per cent. The comparable decrease in English battalions is from 54 in 1950 to 34 last July, a decrease of 27 per cent.

Mr. G. Campbell: But would the hon. Gentleman bear in mind the particular point that recruiting in Scotland, which the Government badly needs, is so much better?

Mr. Boyden: Yes. This is one of the factors fully taken into consideration.
I should make it clear that the Scottish regiments are not being singled out and being asked to take more than their fair share of cuts in major units. Equally, however, there is no reason why units drawn from the rest of the United Kingdom should bear the brunt of amalgamations and disbandments.
I should like to take the opportunity of commenting on the point made in The Times article recently on infantry reorganisation. This was not an inspired leak. The reorganisation will not lead to the introduction of a corps of infantry,

and regiments will continue to retain their names and identities within the larger divisional framework.
On the question of Colonel Mitchell which has been raised, I came quite objectively to the system of promotion in the Army, and I found it completely fair. In the case of Colonel Mitchell, I took the rather unusual step of asking the Military Secretary to assure him that he had a satisfactory career in the Army and that he should very carefully consider any steps he was taking. I do not think I should go further. But the idea that Colonel Mitchell has been driven out of the Army by establishment "nabobs", either Ministers or "brass hats", is false.

Mr. Tam Dalyell: Will my hon. Friend also take this opportunity to confirm that the bestowing of honours is a matter for the military authorities and not for politicians?

Mr. Boyden: Promotion and awards and so on should be left to the military authorities in the way it has traditionally been done. It is a fair system and I do not want to make further comment on that aspect.
I hope that I have been able to convince hon. Members, although I have not had much time, that the selection of units for amalgamation or disbandment is fair and that Scotland is being treated fairly. I cannot anticipate the White Paper and the debate and I have to say, as hon. Members chided me not to say, "Please wait a little longer until the debate."

Question put and agreed to.

Adjourned accordingly at twenty-one minutes past Twelve o'clock.